Some fixed mortgage rates are up despite hints of Bank of Canada cuts. Why?

Some fixed mortgage rates are rising in the Canadian housing market, experts say. Here's why, and what it means for homebuying hopefuls this spring.

Market watchers say some Canadian lenders are raising their fixed-mortgage rates on offer despite indications from the Bank of Canada that rate cuts are possible in the months ahead.

Mortgage experts who spoke to Global News say despite the Canadian central bank opening the door on rates coming down by mid-year, stubborn economic data in the United States might play spoiler for prospective homebuyers eyeing the spring market.

The Bank of Canada held its benchmark interest rate steady at 5.0 per cent for the sixth straight decision last Wednesday, amid signs that key inflation indicators were heading in the right direction.

Governor Tiff Macklem told reporters last week that a June interest rate cut is within the “realm of possibilities” — a departure from previous messaging when he said it was “too early” to talk about lowering the policy rate.

He said the central bank is now looking for evidence that recent easing in inflation will be “sustained.”

The Bank of Canada’s key interest rate informs rates that Canadian lenders post on products including variable mortgages.

Changes in market sentiment about the rate path can also influence rates on offer, as the bond yields that inform fixed rates rise or fall based on traders’ expectations for the policy rate.

Despite indications that the Bank of Canada’s tightening cycle could be coming to an end, bond yields have been rising over recent weeks.