Five-year fixed rates have dominated consumer mindset all year, but that dominance may start waning in 2020. If you believe unemployment has bottomed out in this country, and you believe an inverted yield curve is rate-bearish, and you’re a financially secure borrower, you’re probably going to steer clear of a 5-year fixed. Instead, you might focus on terms that cost...
Most big banks now have online mortgage pre-approvals. No news there. But three decades following the invention of the world wide web, big banks still don’t let you get a mortgage: on virtually any smartphone, tablet or computer without ever speaking to a banker with an instant credit check with automated screening of your application data with an industry-leading, fully...
When Scotiabank launched its eHOME Mortgagein March, it promised a faster, easier way to get a big-bank mortgage, with compelling rates to boot. Since then, industry-types have watched and wondered if eHOME would get much traction. It has. “When we built Scotiabank eHOME, we set out to create a unique mortgage experience for our customers, focused on simplicity, security, transparency...
Special to RateSpy, By John Bordignon, Capital Markets Consultant Earlier this year, while calling for innovation in the mortgage industry, Bank of Canada Governor Stephen Poloz discussed the need for mortgages longer than five years. Longer-term mortgages, he explained, would benefit both consumers and the Canadian financial system. Based on volumes to date, Poloz’s comments moved the needle only slightly...
A new 5-year fixed will cost you more today than it did last month, but not as much as normal. Canada’s biggest banks have been boosting their advertised mortgage rates following a 1/4-point pop in their funding costs over the last two weeks. Let’s go to the charts… The following graph shows what’s been happening. It’s a picture of Canada’s...
Bond yields erupted Friday for the biggest two-day gain since 2011. Canada’s 5-year yield—which is closely watched for its influence on fixed mortgage rates—closed at its highest point since July. This comes after the Trumpinator heralded a potential U.S./China trade truce. The trade war, now a year and a half old, has pounded mortgage rates on the assumption that weaker...
As much as academics advise against it, people (consciously or subconsciously) try to predict interest rates before choosing a mortgage. But, interestingly, they don’t look very far into the future when making these forecasts. “…Households are forward-looking over relatively short periods of time,” research shows. A 2015 international study byCristian Badarinza, John Y. Campbell and Tarun Ramadorai found that “the...
Mortgage debt has been in the crosshairs of federal regulators for years. But considerably less attention has been paid recently to unsecured debt—i.e. credit card—balances for which have been growing at an alarming pace. And with the 2016/2018 mortgage stress tests crimping the amount homeowners can borrow at low rates, it’s likely that even more Canadians will be forced to...
Canadian mortgage rates follow U.S. rates like spring follows winter. So today’s U.S. Federal Reserve rate cut is most relevant indeed. The Fed chopped the floor for its key target rate by 25 bps today to 1.75%—the same as the Bank of Canada. It’s the second cut in 49 days, but only the second cut since 2008. As usual, the...
Bond Bloodbath It was a grisly Friday the 13th in the bond market.Investors ran from bonds like they were being chased by Jason Voorhees with a chainsaw. U.S. 5-year bonds crashed (yields soared 12 bps), which drove Canada’s 5-year to a two-month high. For non-bondy types, bond selling drives up rates since the two move inversely. Catalysts for the carnage...
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