TORONTO (NEWS1130) – Canadian mortgage brokers say it’s unlikely for the US Federal Reserve’s rate hike to cause any significant boost in mortgage rates north of the border.
Steve Pipkey of Vancouver-based online brokerage Spin Mortgage says the bond market has already priced in the increase.
The US central bank announced Wednesday that it’s boosting its key interest rate by a quarter point to a range of 0.5 to 0.75 per cent, thanks to strong signs of economic growth and expectations that inflation will climb higher.
Interest rate hikes signal that the US central bank is feeling optimistic about the economy and tends to cause bond yields on both sides of the border to move higher said Rob McLister, the founder of RateSpy.com.
Canadian five-year and 10-year yields did move slightly higher following the announcement from the U.S. Federal Reserve.
However, it’s unlikely that the move in bond yields will be strong enough to cause a significant boost in five-year fixed mortgage rates, experts say.