mortagesandforeclosures

Canada's 5-year bond closed Wednesday at 2.56%…after its biggest 2-day jump in eight months. As most know, fixed mortgage rates are linked to bond yields.  Certain non-bank lenders have already reacted by raising rates 0.05% to 0.20%.  While no big banks have moved yet, they may be getting anxious.  The cost of funds on 5-year money has soared roughly 30% (relatively, not absolutely) in the last month.  The spread between banks' advertised 5-year rate (3.95%) and bond yields is now down to 1.39% from about 2.00% a month ago.  When you factor in branch discretion (i.e., the additional discounts offered to some customers), the spread is often even narrower.  It is difficult to imagine the Big 5 not raising rates if yields move higher.  A lender email from yesterday said: "rates are artificially low. Watch for fixed rate increases."  Indeed, it seems some lenders are taking extra pains to avoid raising rates and giving up market share.

Get all the information and photos:: http://mortgagewide.info/yields-way-up/