Even with news speculating of impending rate hikes, lenders keep lowering mortgage rates as competitive spring real estate market begins to heat up.  Fixed rates have dropped with specials as low as 3.64% on 5 year terms ( 30 day rate hold ), 3.79% for 5 years can be held for 120 days and now variable rate is as low as 1.75%! 

That being said, investors with millions of dollars at stake think the Bank of Canada is four months away from its first prime rate hike in over 2 1/2 years.

The Bankers’ Acceptance rate (BA) yields are at an 11-month high.

BAs influence variable-rate mortgage pricing and they’ve been dormant for almost a year.

Now, the interest-rate market is waking up.  Traders are pricing in a 1/4 percentage point rate increase on July 20. 

July 20 is the Bank of Canada’s first interest rate meeting after its conditional moratorium on rate hikes ends.

Traders aren’t always right, but opinions backed with money usually mean more than opinions without.

Economists surveyed by Bloomberg are calling for a 1.25 percentage point jump in Canada’s key lending rate by year-end (from 0.25% today to 1.50%) which typically shifts prime rate in equal segments.

Time will tell.