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Canadian mortgage rates are falling as bond yields slide lower What's bad news for some is good news for others, and Canadian mortgage-holders are the unexpected beneficiaries of some of the gloom that's hovering over Canada's economy. Fixed mortgage rates have been falling precipitously in recent weeks, as the cost of financing those loans has gotten cheaper. Banks and other lenders get the money that they loan out in mortgages by borrowing it themselves on the bond market, and the yields on five-year bonds have been falling since May 2018. A five-year Government of Canada bond was yielding just 1.45 per cent on Monday. That's the first time the figure has been below 1.5 per cent since the summer of 2017. Variable rates moving lower too And it's a similar story on the variable rate side — albeit for different reasons. Unlike fixed-rate mortgages which take their cues from the bond market, variable rate mortgages tend to move in conjunction with whatever the Bank of Canada is doing. And investors are betting that the central bank will soon be moving its rate down, not up. Investors in financial instruments known as overnight index swaps are pricing in zero chance of a hike this year, but about a one-in-five chance of a cut by July, and up to a 44 per cent chance by September. 250.885.6900 www.buzzbluemortgages.com