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Workers remove snow from the roof of a condominium under construction, Wednesday, Jan. 25, 2023, in Portland, Maine. On Thursday, Freddie Mac reports on this week's average U.S. mortgage rates. (AP Photo/Robert F. Bukaty)Robert F. Bukaty/The Associated Press

Waiting for the Fed

Mortgage costs in Canada hinge largely on the U.S. Federal Reserve. That’s seemingly a problem given investors expect another 100 basis points of rate hikes south of the border.

But the market knows this. It’s already priced into bond yields, which drive fixed mortgage rates.

Unforeseen global shocks aside, we’d need to see even stronger economic data to drive rates much higher. And the more time that consumers struggle with crushing interest rates, the less likely that becomes.

McLister: Canadian mortgage holders are surviving extreme rate hikes, here’s eight reasons why

Meanwhile, most borrowing costs are essentially unchanged from last week. Lenders remain in wait-and-see mode with critical Canadian and U.S. jobs numbers due Friday, and inflation reports in the next two weeks.

Given the likelihood of lower rates in 2024, one- to three-year fixed rates provide the best risk-reward for most financially stable risk-tolerant borrowers. That’s true despite them costing more upfront than longer-term fixed mortgages. Short terms also allow you to refinance quicker without penalties, a strategy many will employ as rates fall.

Lowest nationally available mortgage rates

1-year fixed5.74%Ratehub5.69%QuestMortgage
2-year fixed5.64%Ratehub5.49%QuestMortgage
3-year fixed5.24%Ratehub4.99%Radius Financial
4-year fixed5.19%Investors Group4.84%Ratehub
5-year fixed5.14%QuestMortgage4.69%Nesto
10-year fixed5.94%HSBC5.29%QuestMortgage
Variable6.10%HSBC5.50%True North
5-year hybrid5.65%HSBC6.06%Scotia eHOME

Source: Robert McLister; data as of March 9

* Home equity line of credit

Rates are as of March 9, 2023 from providers that advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20-per-cent down payment, or those switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1-million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.

Robert McLister is an interest rate analyst, mortgage strategist and editor of You can follow him on Twitter at @RobMcLister.