Fixed rates are up across the board this week.  Most lenders have increased their 5 year terms by about 0.35% which is a huge increase for most borrowers.  We still have a lender that has a 5 year fixed at 3.84% but this may increase over the next few days.  If you want a rate hold, please contact us.

This increase may eventually be tempered by a few factors.  The Canadian dollar just reached $1.04 and this continued strength should eventually have a negative effect on Canadian export numbers.  Canadian exports have been extremely resilient to date despite the rising dollar but this cannot go  on indefinitely. 

Another factor is the shutdown of a number of important Japanese factories.  A number of auto factories in Ontario have had to shut down due to a lack of parts from their parent companies in Japan.  These Canadian auto plants represent a huge dollar total in overall GDP.  I think we will see a similar domino effect in various industries as certain key supplies, such as electronics, become unavailable for the foreseeable future.

This will be slightly offset by the increased export of Canadian lumber to supply the Japanese rebuilding effort. The monstrous US deficit is still not under control and this will lead to more increases in the value of the Canadian dollar. 

The above factors should also prevent the Bank of Canada from raising the prime rate for another few months.

If my assumptions are correct, we should see a slight retreat in the fixed rates in the next month.