Mortgage Market Update - March 5, 2025

As we approach the March 12 Bank of Canada (BoC) meeting, market expectations are shifting, with a 72% chance of a 25 bps rate cut. Here's what you need to know:

📉 Rate Trends & Expectations

Prime Rate: 5.20%
BoC Policy Rate: 3.00%
Next BoC Meeting: March 12, 2025
Market Expectation: 72% chance of a 0.25% rate cut

🔻 Bond Yields & Fixed Rates

The 5-year bond yield has declined by 0.10% this week, currently sitting at 2.57%. If this downward trend continues, we may see fixed mortgage rates adjust lower in the coming weeks. However, it’s important to note that fixed-rate Interest Rate Differential (IRD) may increase, making it more costly to break a fixed-rate mortgage early.

📉 Rate Trends & Expectations

Prime Rate: 5.20%
BoC Policy Rate: 3.00%
Next BoC Meeting: March 12, 2025
Market Expectation: 72% chance of a 0.25% rate cut

Yield Changes:

5-Year Bond Yield: 2.57% (-0.10% from last week)
Insured Yield Spread: 1.52%
Uninsured Yield Spread: 2.02%

🏡 Current Mortgage Rates

Insured Rates (High Ratio – Less than 20% Down)

5-Year Variable: 4.25% ($5.40 per $1K) – Qualifying Rate: 6.25%
5-Year Fixed: 4.09% ($5.31 per $1K) – Qualifying Rate: 6.09%
3-Year Fixed: 4.14% ($5.34 per $1K) – Qualifying Rate: 6.14%

Uninsured Rates (Conventional – $1.5M+ Purchase Price)

5-Year Variable: 4.60% ($5.10 per $1K) – Qualifying Rate: 6.60%
5-Year Fixed: 4.59% ($5.09 per $1K) – Qualifying Rate: 6.59%
3-Year Fixed: 4.59% ($5.09 per $1K) – Qualifying Rate: 6.59%
HELOC: 5.70% ($4.75 per $1K) – Qualifying Rate: 7.70%

🔍 What This Means for You

✅ Fixed rates could decline in the near future if bond yields continue to trend lower. If you're considering locking in a fixed rate, it may be worth monitoring the market over the next few weeks.

⚠️ Variable rates remain steady but could decrease if the BoC proceeds with a rate cut next week.

💡 Penalty costs may increase for fixed-rate mortgages due to declining bond yields. If you’re unsure whether a fixed or variable mortgage is right for you, let’s discuss your options.

📅 Upcoming BoC Meetings: Mar 12 | Apr 16 | Jun 4 | Jul 30 | Sep 17 | Oct 29 | Dec 10

🎉 Enter My Bank of Canada Rate Poll Giveaway!

Think you know what the Bank of Canada will do at their next meeting? Submit your prediction for a chance to win a prize! Click below to enter:

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📚 Recent Blog Articles & Mortgage Planning FAQs

Stay informed with our latest blog articles and mortgage insights:

Blog Articles:

Mortgage Planning Playbook:

If you have any questions about these updates or want to discuss your mortgage strategy, feel free to reach out!

Best,

Matt Parker