The pessimism that has been ruling the markets since the U.S. election may ease a little today.  President Obama is set to meet with the leader of the Republicans in an effort to avoid the fiscal cliff.  Bond yields are virtually unchanged, up just 1 basis point (bp).

We’ve been enjoying flat mortgage rates for a number of weeks now, with a downward trend in bond rates.  We’ve come down 15 bps over the last month so that being said, there’s little reason for mortgage rates to move up any time soon.  There’s been a bit of a cushion built into today’s rates as the cost to the lenders has come down, yet mortgage rates have not moved with them.

The market is still adjusting to the recent  B-20 underwriting changes that took effect the end of October.  As we go into what is generally a seasonal slowdown, it’s hard to really tell the impact it will have more immediately.  Come the spring, that may be the true test of this latest round of changes.

One can only hope that all this government meddling hasn’t caused more problems for the Canadian housing market.  I can appreciate the intent of trying to provide a soft landing and reduce the household debt issues that have been raised, but needing to step into the market four times in as many years seems a bit excessive, doesn’t it?

BEST RATES: 1yr 2.69% – 3yr 2.65% – 5yr 2.94% – 5yr Variable 2.65%

Lee Welbanks is a Mortgage Broker with Welbanks Financial Group, reach out to him if you have any questions about these changes and how they affect you. Heard about our awesome new home search tool? We’ve opened up the MLS just for you. Make sure you log-in to our custom Spring Realty Homefinder Tool and give it a spin! Find us on Facebook and Twitter too!

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