Does US mortgage rate hikes affect Canada’s mortgage rates?

Seeking Advice
1

With the recent news of US mortgage rates increasing due to factors like elections and bond yields, could this impact mortgage rates here in Canada?

2

I’m no expert, but Canadian and American mortgages work quite differently. In the US, a fixed-rate mortgage can lock in the same interest rate for 30 years. In Canada, ‘fixed’ rate mortgages typically only fix the rate for shorter terms, like 5 years, before adjustments. The risk profiles are pretty different.

3

@Luca
Adjustable-rate mortgages (ARMs) are common in the US too. While the 30-year fixed rate is popular, ARMs are definitely out there as well.

4

Rafe said:
@Luca
Adjustable-rate mortgages (ARMs) are common in the US too. While the 30-year fixed rate is popular, ARMs are definitely out there as well.

True, but the main difference is that Canada doesn’t have a 30-year fixed rate option.

5

@Luca
Yeah, you’re right.

6

Rafe said:
@Luca
Yeah, you’re right.

Really? Can you name any Canadian lender that offers a 30-year fixed rate?

7

Rafe said:
@Luca
Yeah, you’re right.

Any examples? I thought the closest was RBC’s 25-year fixed rate, but the rate was super high.

8

Tate said:

Rafe said:
@Luca
Yeah, you’re right.

Any examples? I thought the closest was RBC’s 25-year fixed rate, but the rate was super high.

As far as I know, Canada only has terms up to 5 years with a 25- or 30-year amortization. After the term ends, you have to renew or refinance.

9

Not directly, but US interest rates influence the global economy, which affects mortgage rates everywhere, including Canada.

10

The US and Canada’s mortgage markets do affect each other since both consider global market conditions. And because Canada is a major trade partner, economic changes in the US can definitely ripple over to Canada.