Mortgage brokers: Are you asking the right questions when choosing a mortgage brokerage? + MORE Aug 7th

As a mortgage broker, you negotiate tirelessly to secure the best rates and terms for your clients. But have you applied the same diligence to selecting your brokerage?

It’s amazing what a couple of days can do to the human psyche.

When markets drop like they did on Monday, you may not immediately think of the impact on mortgage rates. We’ve been relying on the Bank of Canada to nudge rates lower, namely for variable mortgages. But fixed mortgages got a news headline-worthy update today, thanks to bonds, which are reacting to yesterday’s global stock sell-off.

Bond yields have a “positive correlation” with fixed mortgage rates. That means when bond yields go up, so do fixed-rate mortgages, and vice versa. And since Canadian five-year government bond yields have dropped to 2.9%, as of Tuesday, mortgage rates are expected to come down, too. 

What are bonds?
Bonds are a form of debt security. Governments and corporations issue bonds to borrow money from investors. The amount borrowed is referred to as the bond’s face value or par value.

Interest is paid on the face value to reward investors for lending their money. The rate may be fixed—constant over the duration of the bond—or variable, changing over time in response to changes in a benchmark interest rate such as the prime rate…