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Oil prices cracked US$100 a barrel again this week, rekindling inflation worries, lifting bond yields and prompting a smattering of small lenders to hike fixed mortgage rates.
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But we’re still not seeing a major response from Big Six banks, which directly or indirectly dictate pricing for more than four out of five mortgages in this country.
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Banks are notoriously slow to change rates. They want proof a yield trend has staying power before making big pricing moves.
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Moreover, they didn’t trim rates much when oil prices plunged last month, so they have less of an excuse to hike at the moment.
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That said, banks lift faster than they cut — funny how that works — so if Canadva’s five-year yield closes at a new multi-year high (it sits roughly 18 basis points shy as this is written), expect higher fixed rates to follow.
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Meanwhile, sub-four-per-cent fixed offers for two-, three- and five-year mortgages are still advertised at online brokers and certain credit unions.
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Any rate that starts with a three, or close to it, is historically fair. If you look at the last ten years, the lowest advertised five-year fixed rate has averaged about 3.70 per cent. Hence, for borrowers where locking in is appropriate, no one should avoid doing so on the theory that rates are “too high.”
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Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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For the best national insured and uninsured mortgage rates, updated daily, please visit our mortgage rate page here.
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