Sweet, black gold is flowing again, just as Canada hits peak mortgage renewal season. BMO Capital Markets says the recent Hormuz Strait deal is pulling Government of Canada (GoC) bond yields lower, though fixed-rate borrowers may see little of it. The bank says variable rates still look like the better option. The real estate industry fixates on Bank of Canada (BoC) rate decisions, but those only move variable rates—a minority of Canadian mortgages. The vast majority of outstanding mortgage debt is fixed-rate, benchmarked to GoC bond yields of similar terms. For example, the 5-year GoC bond yield sets the foundation that the 5-year fixed-rate mortgage is built on.
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