5-Year Government of Canada Bond Yield
The interest rate on 5-year Canadian government bonds — the benchmark that drives 5-year fixed mortgage pricing.
The 5-year Government of Canada bond yield is the rate of return on 5-year federal bonds and serves as the primary benchmark for 5-year fixed mortgage pricing. Lenders price 5-year fixed mortgages at the bond yield plus a funding spread — typically 140–180 basis points in normal credit conditions, wider during credit stress. When bond yields rise, 5-year fixed mortgage rates typically rise within 2–8 weeks; when yields fall, fixed rates follow similarly. Bond yields move on inflation expectations, economic data, and Bank of Canada policy signals.
Related Terms
A mortgage where the interest rate is locked for the full term, keeping your monthly payment constant regardless of Bank of Canada decisions.
The overnight target rate set by the Bank of Canada — the single most important interest rate in the Canadian economy.