Fixed mortgage rates in Canada track the five-year Government of Canada bond yield far more closely than they track the Bank of Canada's policy rate. If you want to anticipate your next fixed rate, the bond market is where to look.
The one number to watch
When five-year yields climb, fixed rates usually follow within days or weeks. When yields fall, lenders tend to pass the savings along more slowly.
- Yields rising steadily? Locking a pre-approval early protects you.
- Yields drifting down? Waiting can pay, but the edge is usually small.
You don't need to become a bond trader. Checking one yield once a week during a house hunt is enough to see which way the current is pulling.
