If there’s one thing the major banks wish would go away, it’s talk about their fixed-rate mortgage penalties. Competitors constantly use accounts of huge bank penalties to sell against the banks, and the media picks up on it. Expect more of this as mortgage penalties approach record highs. In the last few months, we’ve seen non-bank lenders increasingly market their...
Any creditworthy mortgage shopper is practically guaranteed to get a better rate today than they could have at the start of the year. Fixed mortgage rates have been on a ski slope this year, sliding to two-year lows this month. If you’re wondering how far they’ve tumbled, here’s a look. These were the best widely available 5-year fixed rates, as...
Remember the days of: VCRs Paper maps Beepers Being able to rely on banks lowering prime rate when the Bank of Canada cut its overnight rate? Well, times change. And so has the pressure on banks to grow earnings each quarter. Falling rates and a flattening yield curve have squeezed bank profitability, leading them to resort to unconventional earnings tactics....
President Trump has figured out how to get his way and force more rate cuts out of the Federal Reserve: Create trade panic. Trade wars—exacerbated last week by Trump’s latest gambit—could cost the global economy up to $1.2 trillion and pressure the Fed to cut rates more than expected. North American yield curvesinverted furtheron this news, suggesting higher probability of...
A fourth major bank has cut its posted 5-year fixed rate today. This time it’s BMO. The move comes four long months afterthe 100+ basis-point collapse in 5-year bond yields. Such a delay in reducing posted rates after large, market-wide rate drops is unusual historically speaking, as we’veexplainedpreviously. See the chart below for more perspective. BMO’s cut today has implications...
The most important rate in the mortgage industry has dropped. Better late than never. The benchmark posted 5-year fixed rate has fallen from 5.34% to 5.19%. It’s the firstchange since May 9, 2018. And it’s the first decrease since Sept. 7, 2016, despite a 106-basis-point nosedive in Canada’s 5-year bond rate since November 8. Why it Matters The benchmark rate...
Ever since decade-long mortgages slipped under 3% for the first time in May, those offering such rates have fielded more inquiries than ever before. And today, we saw another record breaker, with Sigma Mortgage offering the lowest 10-year fixed of all time: 2.89% (details below). But the more interesting aspect may be this: The company who just advertised that rate...
Not much going on this weekend. Only a little meeting between the world’s two most powerful leaders about 2019’s single most important economic issue. U.S. prez Trump and Chinese supreme head communist guy, Xi, collide over trade ahead of Saturday’s G-20 summit in Japan. And, batten down the hatches, because it has the potential to be a short-term tide changer...
If you’ve watched mortgage rates for a long time, you know how unnatural this is. The rate on a mortgage with five full years of locked-in interest expensecosts less than the rate on a non-guaranteed floating mortgage with interest risk. In fact, that difference (spread) is the lowest it’s been in decades, based on deep discount rates offered to well-qualified...
The latest intel from Canada’s mortgage market… Tanker Attack TorpedoesRates There weresparksthis week in the powder keg that is the Middle East. Sea terrorismtriggered fears of war and/or oil supply disruption. That led investors to pile back into “safe” Canadian government bonds. As is usual when the market goes into “risk-off” mode, bond prices rose and yields sank (the two...
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