June 2009 
There are 1 blog entries for June 2009.
Why Mortgage Rates are Rising
Thursday, June 4th, 2009 at 6:25pm. 1029 Views, 3 Comments.
Last week's move by Canadian lenders to raise their longer fixed term mortgage rates sparked some interesting discussions amongst clients. I thought it would be helpful to revisit what influences mortgage rates and discuss why Canadian mortgage rates are increasing.
Mortgage Rates & Bonds
Contrary to popular opinion, mortgage rates are not tied to interest rates *at least not directly*. Mortgage rates in fact are related to bonds and their yields (rates). Bonds are what are known as debt instruments, and Canadians have roughly 30 times more invested in debt markets *mainly bonds* than they have invested in equity markets *stocks*. The yield of a bond increases as the price of the bond falls. We won't get into the many variables affecting bond prices &…
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