Canadian Mortgage Holders…Inverted Bond Yield Curve Provides Rare Opportunity

//Canadian Mortgage Holders…Inverted Bond Yield Curve Provides Rare Opportunity

Canadian Mortgage Holders…Inverted Bond Yield Curve Provides Rare Opportunity

For those Canada homeowners who are looking to save money, a window of opportunity has just opened for those who act quick.

You heard us use the term inverted yield curve, but what does it really mean and how can I as a homeowner take advantage of this?

Great question!

The term inverted yield curve is industry jargon and we won’t go to great lengths to explain it…we need you awake for when I share the savings that may be available to you. Quickly, an inverted yield curve happens when long-term bond yields fall below the short-term yields. Given that mortgage interest rates are tied to bond yields, we are now seeing short-term fixed rates priced higher than say the 5-year fixed rate today.

We know, crazy…right?

Why is it a big deal?

Typically, we see a laddered approach to pricing where the 2, 3, 4 and 5-year fixed rates are incrementally higher as you go up in term. Today, that is less the case. For example… we are seeing some lenders with the 3 and 4-year fixed rates priced higher than the 5-year fixed.

What is the opportunity and how can I benefit?

We thought you would never ask!

If you have a fixed rate higher than 3.19% or you took out a new mortgage, refinanced and existing mortgage, or renewed your current mortgage after February 2018, there is a high likelihood your mortgage rate is greater than 3.19%.

Here is a quick story…

We have a customer who renewed her mortgage in December 2018 for a 5-year term at 3.59%…that was a great rate back then. Fortunately for the both of us she reached out to us, on the recommendation of a friend who is a current client of ours, to have us add her to our mortgage management software system as she was not a client of ours previously.

In taking her information, we saw a massive opportunity for her. Before we shared what we thought was possible, we wanted to run the numbers for her first. Here are those numbers.

$354,756.36 Mortgage Balance

$3,175.22 Breakage Penalty

@3.59% $53,496.74 In interest paid over the remaining 54 months

@3.04% $44,771.26 In interest paid over the the same 54 months

The is a savings of $8,725.48 in interest costs.


@3.59% $310,475.60 Remaining Balance after 54 months

@3.04% $301,747.12 Remaining Balance after the same 54 months

A further $8,728.48 in Principal reduction!

We walked her through these numbers and what do you think she said?

HECK YA! How quickly can we do this?!

How is this even possible?

Because in this case our client has 4.5 years remaining and lenders will use the 4-year fixed term for rate comparison purpose when calculating the penalty. With the 4-year fixed rate being priced higher than the 5-year fixed rate, this means that a 3-month interest only penalty will apply…not the massive IRD penalty. If you are with a bank, you may still be clubbed with a massive IRD, even in this case. But don’t be discouraged…we can help.

You might be thinking, why haven’t I heard of this until today?

Likely, it is because you are not an existing client of Canada Mortgage Direct. We say that because very few Mortgage Brokers pay any real attention to the data, trends, etc…, sadly. And banks, why would they help you save money at their expense?

At Canada Mortgage Direct, we are different. We believe you are hiring us to proactively manage your mortgage and provide the lowest cost of home ownership over the life of that mortgage. We want to bring you real value = real savings. Interest rate gets you from term to term, but Proactive Mortgage Management gets you to Mortgage Freedom, Faster!


Canada Mortgage Direct believes that ‘Everyone deserves a home…we believe it should not not cost you your future.’

Our Adopt-A-Mortgage program is unique and responsible for saving Canadians thousands in unnecessary interest costs. It allows us to share market intelligence and provide addition savings beyond rate alone…this is where the real savings happen.

You may not have completed your mortgage with us or perhaps you’re with a big bank…that is okay. We understand that despite our best efforts, we cannot possibly help every Canadian homeowner. But we really want to help those who value our services.

For a limited time, we would like to extend our services to you, pro bono. No fees, No hidden fees, No kidding! We want to earn your future business.

What do you say, can we do the heavy lifting for you? If we can leave more of your hard earned dollars in your pocket, would you consider that a success?

All you have to do is call us or text us at 403.250.2100 or shoot us an email at,


By |2019-06-13T08:26:08-06:00June 13th, 2019|Uncategorized|Comments Off on Canadian Mortgage Holders…Inverted Bond Yield Curve Provides Rare Opportunity

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