Winnipeg Mortgage Rates Today - Set to Rise Tomorrow?

February 23, 2021 | Posted by:

Winnipeg Mortgage Rates Today

At the end of 2020 we released our mortgage predictions for 2021. Within this press release we stated that mortgage rates will rise after the midpoint of the year ahead. While the Bank of Canada overnight rate (which impacts variable mortgage rates) is expected to stand at .25% something else is making our prediction come true, and earlier than expected. Here’s what you need to know. 

Why Mortgage Rates Today (early 2021) Are Rising and What Winnipeg Buyers and Investors Should Do

The Bond Yield Rose

The final business week of February saw a very significant surge in the Canadian bond yield. At .67% it hit the highest level in nearly a year. For the uninitiated, bond yields are closely tied to the 5-year fixed mortgage rate. When the bond yield goes up, the 5-year fixed rate typically does as well. The occurs because lender margins are tightened as funding costs rise. They can only be expected to absorb the increases for so long without having to pass it on to borrowers. While there has not been a sweeping uptick in fixed mortgage rates, lenders today are indeed indicating a rise in certain offerings. 

There is No Cause for Concern for New Buyers

Again, while some lenders are increasing their 5-year fixed mortgage rate offering today, other lenders in Winnipeg are waiting to see how to market as a whole adjusts. The Bank of Canada has made their position very clear - stating that they are here to support the economy by encouraging consumer spending. This encouragement will only come from offering them loans with historically low variable rates during this unprecedented time in history. 

If Winnipeg lenders do collectively “agree” to a sweeping rise in fixed rates, those rates will still be low and attractive for buyers. Sure, the bond yield today has hit it’s highest rate since April of 2020 BUT if you recall at the beginning of the same year fixed rates were still extremely favorable. Or, buyers preferring fixed rates may simply reconsider their stance on the variable rates, and opt to take advantage of variable offerings which remain historically low.

What Should You Do Today?

Ultimately, this rise is a good indicator for our country. The end of the pandemic and economic lockdowns are near, and confidence in economic activity is being backed by the Canadian Government’s proposed $100 billion of post-pandemic stimulus spending. We’re about to bounce back folks, so investing in your future today in something as certain as Winnipeg real estate (the hottest market in Canada) is the smartest course of action.

If you prefer fixed mortgage rates then you should look at the recent news as an opportunity. After all, after recording rock-bottom numbers in 2020 the fixed rate could only go up, so really this upward movement is no surprise. Those who are entering and closing on a mortgage need to lock-in today. By locking in with a pre-approval you guard against rising mortgage rate risks. Contact Ron Chan right away at 204.290.9950 to make it happen.

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