# Canadian Mortgage rates and US debt crisis



## sagsal (Apr 7, 2009)

Would love to hear if this thought makes sense:

While US investors across the board are looking for safe havens outside of treasuries - they will start to buy up Canadian bonds, driving up prices and lowering the yield - significantly lowering fixed mortgage rates over a short period of time


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## andrewf (Mar 1, 2010)

More likely, concern about the US drives the Canadian dollar higher, reducing the need for the Bank of Canada to raise rates to curb inflation. I don't think Canadian yields have far to fall. 10 year bonds are yielding 2.88% at the moment.


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## GeniusBoy27 (Jun 11, 2010)

I'm not convinced of that Andrew. With higher Canadian dollars, there's also going to be concerns about our export manufacturing markets, and slowing economic growth. I'm unconvinced that the Bank of Canada rates will rise rapidly (the variable rate).

However, I will agree that fixed rates really have nowhere to go but slowly up, given the low Canadian yields.


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## calrest (Apr 13, 2011)

I also share your view that Canadian dollar is higher with the positive future for our economical raising. 



andrewf said:


> More likely, concern about the US drives the Canadian dollar higher, reducing the need for the Bank of Canada to raise rates to curb inflation. I don't think Canadian yields have far to fall. 10 year bonds are yielding 2.88% at the moment.


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## GeniusBoy27 (Jun 11, 2010)

Well, with the Fed in the US keeping interest rates low, I just can't see interest rates increasing in the short term, and I can't see the gains that economists predicted (1.75-2% increase in BOC rate) by the end of 2012.

There may be small increases, but rising the rates will exacerbate our trade deficit and hurt our export markets, hurting our overall economy. There actually has been pricing in the markets to expect a BOC decrease (I couldn't believe that when I read it) in BOC prime.


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