What does COVID-19 have to do with interest rates?
Despite the substantial negative impact of COVID-19 across many industries, the virus has had a positive impact on mortgages, specifically for people getting a new mortgage today and for people that were in an existing variable rate mortgage. In general, when bad things are happening around the world, this tends to push interest rates down. Events such as 9/11, the credit crisis of 2008, Brexit and COVID-19 are all examples of situations in which interest rates subsequently fell 1% or more over a short period of time.
During trying times, money usually will flock to safety. Canada is a safe country to park money, and bonds are a safe asset class. Fixed mortgage rates are tied to bond yields, which means when bonds fall, fixed rates fall… CLICK HERE for the complete article