What is a 5-year government of Canada bond yield?

The 5-year Government of Canada bond yield is the annual return on the bond if held until maturity. This includes the interest or coupon rates and the return from bond market price changes. The auction process determines the yield, where investors bid on these bonds.

What is a 5 year bond?

When a 5-year bond is purchased, the buyer will receive interest each year for 5 years on the face value, which is the money they have “loaned” to the government. This is part of what determines the bond’s yield. Since yield is the bond’s return, it can either be calculated with the simple coupon yield or the yield to maturity (YTM).

How long do government bonds last in Canada?

The government bonds are issued with maturities ranging from 2 to 30 years. The 5-Year Government of Canada bond yield is particularly important for homeowners, as 5-year fixed-rate mortgages follow the bond yield.

What is a Canadian Bond?

Bonds are investment instruments the Canadian government offers to help raise money to operate and pay off their debts. Bonds are bought for a set price and repaid in full when the bond matures. They also pay out regularly at a set interest rate, known as the coupon yield of a bond.