Experts: Expect year-end rate drop‏

As the year comes to a close RateSupermarket.ca’s expert panel is echoing the same sentiment it has held for the past two months: Rates will continue to drop.

“The five-year Bank of Canada bond rate is down very slightly. Indeed, the continued uncertainty in the U.S. and Canada, manifested in the weak recovery, is reflected in the bond rates,” said Dr. Ian Lee, director of the MBA program at Carleton University’s Sprott School of Business. “Moreover, the Minister of Finance has announced yet another round of mortgage insurance tightening focused on CMHC with the imposition of a risk fee.

“This provides additional evidence of the government's intention to induce a further slowing of the housing market and thus demands for mortgage financing which will impose downward pressure on fixed rates.”

And while he doesn’t foresee much flux in the next 31 days, Dan Eisner, president of True North Mortgage also believes rates may drop.

“Canadian bond yields have been flat for the last few weeks. As a result we don't expect mortgage rates to fluctuate much in the coming days and weeks,” Eisner said. “Of course this can change suddenly if the Bank of Canada makes an unexpected statement during the next rate announcement.”

The one voice of descent comes from Ron Butler of Verico Butler Mortgage, who believes rates will hold steady going into 2014.

“The tapering news and rumors swirling around the U.S. Fed seem confusing at times, but the bond market voted with its feet and fixed bond yields remain in the low 170s on five-years, indicating not much change in fixed rates for the upcoming month,” Butler said.

All four members of the panel -- which includes RateSupermarket.ca’s president, Kelvin Mangaroo – agree that variable rates will remain steady going into 2014.

“As economic growth still remains below target, there is no reason to anticipate a Bank of Canada rate change this month,” Mangaroo said.