Mortgage Rates Falling as Economic Turmoil Persists

Mortgage rates are falling as economic turmoil persists, with lenders continuing to slash them by the day following a massive bond rally on Monday. Bond yields, which lead fixed mortgage rates, hit a low of 0.27% for the 5-year note and 0.23% for the 10-year. The big banks have also been dropping their special rates, with RBC slashing six of its fixed rates by an average of 35 bps. Variable rate mortgages also took a dive last week following the Bank of Canada’s 50-bps rate cut. Economists expect the BoC to deliver a 75-bps cut at its next meeting and another 25 basis points in June, bringing the Bank of Canada’s overnight rate to just 0.25%, its record low last reached during the financial crisis in 2009.

The Toronto Regional Real Estate Board (TRREB) reported that home sales in the city were up sharply by 45.6% compared to February 2019. The average selling price for all home types in the Greater Toronto Area was up 16.7% year-over-year to $910,290. Consumer Insolvencies Up 8.7% in January, according to data from the Office of the Superintendent of Bankruptcy. This follows a record year for insolvencies in 2019, which saw a total of 137,178–the second highest number of annual insolvencies.