As fixed-rate mortgage rates start to come down, some brokers are warning against locking-in longer-term mortgages. Kyle Benning reports. Rates have dropped by a full percentage point in the past few months, opening up an opportunity for Canadians eyeing the spring housing market. While experts say there’s little downside to securing a cheaper rate today, committing to a long-term mortgage with rate cuts in the forecast might end up costing some households more.
As of Thursday, rates as low as 4.84 per cent were available for that same product at multiple Canadian lenders, according to James Laird, co-CEO of Ratehub.ca. There has been a shift in sentiment within the bond market as the Canadian economy has weakened and inflation has shown signs of cooling. Forecasters are shifting their expectations for the Bank of Canada’s policy rate from “higher for longer” to now thinking “rate cuts are coming sooner rather than later,” Laird says. That’s driven down yields on products like the government of Canada’s five-year bond in recent months — the key benchmark for fixed-rate mortgages of the same length