Article content

Canadian mortgage rates are increasing again, as economic and profitability concerns associated with the coronavirus crisis and lower oil prices outweigh aggressive monetary stimulus from the Bank of Canada.

Lenders had dropped rates to historic lows this month as the central bank twice cut its key interest rate, ultimately lowering it to 0.75 per cent, one of the lowest levels on record. But starting last week, mortgage lenders across the country began hiking again, according to James Laird, co-founder of mortgage comparison website RateHub.ca and president of brokerage CanWise Financial.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Mortgage rates on the rise again as coronavirus and oil shock weigh on lenders' minds Back to video

With Canadians losing their jobs, lenders are building a bit higher of a risk premium into their mortgage rate James Laird, RateHub.ca

Best rates for a five-year, fixed-rate home loan have gone from around two to 2.5 per cent to between 2.5 per cent and three per cent, Laird said. One reason for the hikes is the recent economic uncertainty, he said. Forecasters have been adjusting their outlooks weekly, saying that a brutal, if short, recession is all but certain. The Conference Board of Canada warned Wednesday of the economy contracting by 1.1 per cent if travel restrictions and social distancing persist until the end of August.