Commercial Indicators Explained for 19 December 2025
1. Commercial Bond Yields (CMB)
These are Canada Mortgage Bond–related reference yields used by lenders to price insured and insurable commercial mortgages (multi-residential, some commercial properties). They typically trade above Government of Canada (GoC) bonds to reflect mortgage credit risk and liquidity.
5-Year CMB – 3.24%
- Security: CANHOU 06/15/31
- Change: +0.05% (up 5 bps)
- Meaning:
- The benchmark yield lenders use for5-year fixed insured commercial mortgages.
- An increase of 5 bps suggests slightly rising rate pressure in this part of the curve.
10-Year CMB – 3.72%
- Security: Est. CANHOU 03/15/36
- Change: +0.03%
- Meaning:
- Reference for longer-term (10-year) insured commercial financing.
- Still materially higher than the 5-year, indicating a normally upward-sloping yield curve.
CMB vs GoC spread
- 5-yr: ~25 bps above GoC
- 10-yr: ~28 bps above GoC
This is a tight spread, signalling healthy demand for insured mortgage bonds and relatively low perceived credit risk.
2. Floating Rate – Insured Cost of Funds
2.73%
- This aligns closely with the GoC 2-year yield.
- Indicates:
- Lenders’ base funding cost for floating or short-term insured loans.
- Actual borrower rates will be this + lender spread.
Practically, floating insured commercial mortgages would price at:
2.73% + lender margin (often 90–150 bps)
3. Prime Rate – 4.45%
- This is the bank prime lending rate, typically:
- Used for uninsured or smaller commercial loans
- Floating loans often priced at Prime ± a spread
Indication:
- Prime remains well above bond yields, which tells you:
- Banks are still protecting margins
- Bond markets are pricing future rate stability or easing more aggressively than banks
4. Government of Canada (GoC) Bond Yields
These are the risk-free benchmark rates for Canada and the foundation for all fixed-rate mortgage pricing.
| Term | Yield | Change |
| 2-Year | 2.73% | +0.03% |
| 3-Year | 2.86% | +0.04% |
| 5-Year | 2.99% | +0.04% |
| 10-Year | 3.44% | +0.03% |
Indication:
- The curve is upward sloping, but not steep
- Short and mid-term yields have moved up slightly across the board
- Markets are not expecting sharp rate cuts, but also not pricing in inflation stress
5. Economic Interpretation
Rate Environment
- Bond yields slightly higher, but in a controlled way
- No volatility spike → markets are calm
Commercial Mortgage Implications
- Best pricing remains in insured multi-residential
- 5-year fixed insured commercial mortgage rates will typically land around:
CMB (3.24%) + 90–140 bps → ~4.15%–4.65%
- 10-year insured rates:
~4.75%–5.25%
Indication
- Borrowers choosing between floating vs 5-year fixed are:
- Paying ~140–190 bps premium for Prime-based floating
- But gaining flexibility if rate cuts materialize later
6. Summary
This data shows a stable, slightly firming bond market, tight CMB spreads, and a continued advantage for insured commercial borrowers, especially in the 5-year term.
Brian Madigan LL.B., Broker