True North Mortgage Rate Forecast
The True North Mortgage Rate Forecast is provided to give clients an estimate of where 5 year fixed rates are headed in the next few days.
The forecast is a compilation of variables which include bond yield spreads, the mortgage rate environment and soon to be announced rate changes.
We analysed 5 years of daily mortgage and bond yield rates to determine the correlation between the two. We discovered that Government of Canada Bond yields are a leading indicator of 5 year mortgage rates. The correlation is present due to the way bank set mortgage rates. Banks and other lenders will look for stable upward or downward trends in bond yields prior to changing their own mortgage rates. This provides some stability to bank employee and bank clients from the otherwise very unstable bond yields.
Prior to making any changes to mortgage rates, banks and other lenders will often call us to let us know a rate increase or decrease is going to occur. This notice is usually 24 to 48 hours prior to a change. The True North Mortgage Rate Forecast will provide us with an effective means to get this information public.
If you have any question about our Rate Forecast please let us know.