Capital Mortgages opened in January 1999 and has since serviced thousands of clients and arranged several billion dollars in build mortgages in Ottawa area.

News of the impending Pfizer vaccine has brought optimism to many Canadians, with a seemingly tangible solution to the COVID-19 pandemic in sight. While the fact that it’s been proven to be 90% effective in clinical trials is great news, it’s also left many of our clients with one looming question – will fixed mortgage rates start to rise?

To break it down, bond yields determine fixed mortgage rates. Currently, the 5-year bond yield is hovering around 0.50%. Since rising yields are tightening lenders’ profit margins, naturally many people expect fixed mortgage rates to increase as a result. 

Bonds tend to be priced based on good news one or two years in advance. This means that by the time the average Canadian is aware that the economy is rolling along at pre-pandemic levels, fixed mortgage rates will have already risen. 

At this point, the consensus is that the only thing that can lower mortgage rates would be a failure of Health Canada to approve the Pfizer vaccine. Rates are already sitting at historical lows and may not necessarily skyrocket anytime soon, but there is definitely an increase on the horizon – at some point. However, just because a vaccine is imminent, it’s important to note that the economy is still sluggish and Canada still has a lot of debt. As a whole, the Canadian economy couldn’t necessarily afford higher rates in the near future.

To put it simply, if you’re looking for a mortgage – now would be the time to lock it in and make use of the incredibly low rates we’ve seen during the pandemic. There’s no definitive answer as to whether rates will rise tomorrow, next month or even next year, but they will eventually. It might be best to act on a sure thing if you can.

If you need help navigating the world of mortgage rates, one of our experienced brokers would be more than happy to assist. Give us a call at 613-228-3888 today!

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