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Economic Viewpoint

Canadian Mortgage Interest Rates Could Rise a Few Percentage Points in the Coming Years

May 4, 2017
François Dupuis, Vice-President and Chief Economist • Mathieu D’Anjou, Senior Economist

Despite the tightening of U.S. monetary policy, Canadian mortgage rates have remained very low up until now. However, the resilience of the bond markets has its limits, and a widespread increase in interest rates is to be expected over the next few years if the economic expansion continues in North America. The extent of the rise will depend primarily on how long it is before the next economic slowdown. The likelihood of mortgage rates skyrocketing is very low and our base scenario only suggests a slight increase. Borrowers should however make sure they can face an average increase of approximately 2% in mortgage rates over the medium term, something that could happen if the economic expansion continue for longer.