Are Mortgage Rates Really Going Up?
Lisa Manwaring • March 3, 2021
With all the economic uncertainty caused by a global pandemic, unprecedented unemployment levels, and government stimulus, mortgage rates have been on a steady decline for almost a year. In fact, we’ve hit some historic lows along the way.
Now, despite the Bank of Canada committing to keeping interest rates low into 2023, if you’ve been listening to the media in the last couple of weeks, you may have heard that interest rates are currently on the rise. But if the government is working to keep rates low, it doesn’t make sense for them to be going up? Well, the key here is to compare apples to apples.
The Bank of Canada controls the overnight rate target, impacting the prime rate, which impacts variable-rate mortgages. In contrast, fixed-rate mortgages get their cue from the bond market.
So while variable rates haven’t moved, the bond market has seen a lot of action, which has caused an increase in fixed-rate mortgages. Since February 5th, Canadian bond yields have surged by almost 0.60%, bringing us to record 12-month highs. In the last 2 weeks alone, we’ve seen rate increases of 0.10% to 0.30% on certain fixed mortgage terms.
So what does this mean for you?
Firstly, make sure you have perspective. There isn’t an emergency here, no need to act rashly. While we’ve seen an increase in fixed-rate mortgages by up to 0.30%, we’re still in a very low rate environment. Two years ago, fixed rates were over 3%, while you can still find terms under 2% today. That’s a huge drop.
Just because fixed-rate mortgages have gone up doesn’t mean you’ll qualify for any less of a mortgage. As the government uses a qualifying rate to stress test your mortgage, the actual contract rate isn’t used to qualify your mortgage.
So, if you’re looking to buy a property in the next little while, interest rates are still very low. It’s a great time to get a rate hold and pre-approval. Let’s talk! At the same time, if your existing mortgage is up for renewal soon or you’d like to refinance to access some equity, interest rates are still very low, historically speaking, we should evaluate all your options. Again, let’s talk!
Regardless of your situation, if you would like a little more clarity on how increasing rates impact you, or if you’d like to discuss mortgage financing, please reach out and contact me anytime. I would love to work with you!
RECENT POSTS
Going Through a Divorce? Don’t Let Your Credit Take the Hit Divorce is stressful enough without adding financial fallout to the mix. Between lawyers, paperwork, and emotional strain, it’s easy to overlook how a separation can impact your credit. But your financial future depends on protecting it now—because long after the dust settles, a damaged credit score can linger. Here are a few smart steps to help keep your credit strong and your finances steady as you move forward. 1. Take Control of Joint Debts When it comes to joint debt, both parties are equally responsible—no matter what your divorce agreement says. If your ex misses a payment on an account with your name attached, your credit takes the hit too. Go through all joint credit cards, loans, and lines of credit. Wherever possible: Close joint accounts to stop future shared use. Transfer balances to the person responsible for repayment. Notify lenders in writing of any changes to account ownership. Once everything is updated, pull your credit report after three to six months to confirm all joint accounts have been closed and reporting correctly. Mistakes happen—stay proactive to prevent surprises later. 2. Open Your Own Bank Accounts Separation means financial independence, and that starts with your own banking. Open a new chequing account in your name only and redirect your pay deposits and bill payments there. At the same time, close any joint bank accounts and change passwords on existing online banking and credit profiles. Even in peaceful separations, shared access can cause confusion—or conflict. Protect yourself by ensuring your money and information are secure. 3. Start Building Credit in Your Name If most of your past credit was tied to your spouse’s name, now’s the time to establish your own. Apply for a small personal credit card or secured credit product . Use it sparingly and pay it off in full each month. This helps you build a solid individual credit history, setting the stage for future goals like buying a home, refinancing, or starting fresh financially. 4. Keep an Eye on Your Credit Monitor your credit report regularly for errors or unexpected changes. You can request free reports from both major credit bureaus in Canada— Equifax and TransUnion —once a year. Tracking your credit isn’t just about catching mistakes; it helps you see your progress as you rebuild your financial independence. Final Thoughts Divorce can be emotionally draining, but protecting your credit doesn’t have to be complicated. By taking a few careful steps now—closing joint accounts, building credit in your name, and monitoring your reports—you’ll safeguard your financial health and gain peace of mind as you start your next chapter. If you’d like personalized guidance on managing credit during or after a divorce, reach out anytime. I’d be happy to walk you through your options.
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.
