How to Choose the Best Mortgage Option for You?

June 26, 2024

Welcome to our new episode of Make Money Count! In this episode, we address the drop in the Government of Canada’s 5-year Bond Yield and how it affects mortgages rate. The Bank of Canada is cautious about cutting rates too quickly because of inflation concerns, even though many people are feeling financial pain. With more missed payments and high non-mortgage debt, the economic outlook for many is bleak. Watch now to stay informed and make smart financial decisions with our expert analysis and insights.

Episode Highlights

Government of Canada 5-Year Bond Yield

We discuss the recent drop in the Government of Canada’s 5-year bond yield to 3.3%, influencing long-term borrowing costs significantly. This drop means the average 5-year fixed mortgage rates are now around 4.8%. While these lower fixed rates sound good, it may still be smarter to consider a variable-rate mortgage right now, given the current state of the economy.

Bank of Canada’s Rate Strategy

We review how the Bank of Canada is still being cautious about lowering interest rates too quickly because of ongoing concerns about inflation. Whether they cut rates in July or September will depend on how well the economy is doing in both Canada and the US. High interest rates are making it hard for people to pay their bills on time. This is causing more people to miss payments and fall behind on their debts.

Canadian Consumer Struggles

In early 2024, around 34,000 people missed a mortgage payment, and there’s now $1 billion in mortgages severely overdue. On top of that, 1.26 million Canadians missed payments on other things they owe money on, making it harder for them to borrow money in the future.

Stay tuned for our next episode, where we’ll bring you more financial news and insights to help you make money count. Don’t forget to subscribe to our YouTube channel and follow us on social media for more updates!

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