The “neutral rate” has taken on a life of its own. The Bank of Canada is talking about it, analysts are talking about it, the media is talking about it and everyday mortgagors are talking about it. Millions of Canadians, us included, use it as reference when trying to estimate how high rates might go. But the neutral rate is...
Despite higher rates, a healthy slice of our population is staying open minded to variable mortgage rates. A CIBC poll today finds that: 72% of Canadians expect rising interest rates over the next 12 months (26% think they’ll stay the same) An overwhelming 83% of Canadians favour “predictability and stability over risk” when it comes to their finances (unsurprisingly) 77%...
Love it or hate it, Canada’s controversial mortgage stress test has led to one welcome benefit: bigger mortgage discounts. That’s due partly to slowing demand for B-20-compliant mortgages—i.e., mortgages that require borrowers to pass the banking regulator’s “stress test,” which was adopted in January. In its latest Senior Loan Officer survey, the Bank of Canada writes, “Mortgage approval rates continued...
Someday you’ll be getting mortgage advice from an online robot. This “chatbot” will ask you questions to determine your needs. It’ll then recommend the most suitable mortgage based on your answers and its programming. Today, of course, people use human mortgage advisors for this very same thing. But robo-advisors are different. They don’t: Sleep (They’re available anytime you are, 24/7/365)...
All it takes to derail an uptrend in mortgage rates is one little global crisis. And that’s potentially what we’ve got. Canada’s 5-year bond yield—which drives fixed mortgage rates—has plunged. As of this writing, it’s down almost 30 basis points from its high two Fridays ago. This latest nosedive is courtesy of shoot-first-ask-questions-later AAA bond-buying. (Rates move inversely to bond...
Prime – 1.00% is a primo mortgage rate. No question about it. Yet, there are people complaining that it’s not the “prime minus one” of old. Prior to January 2015, critics point out, prime rate was 200 basis points (bps) above the Bank of Canada’s key lending rate. Now, banks have pushed this margin to 220 bps. The fatter this...
Confusion and angst. That’s what TD caused with its 45-basis-point 5-year posted rate hike on Friday. But as it turns out, no other banks matched it, at least not yet. Unless you’re a TD customer,the bank’s gambit should have limited ill effects. Status Quo with the Stress Test TD’s monster move had no impact on themortgage qualifying rate(MQR) this week,...
We’re seeinggovernment bond yields approaching seven-year highs, and now this. TD has just boosted its posted 5-year fixed a whopping 45 basis points (bps) to 5.59%. Over the last decade, the average increase to posted 5-year fixed rates has been24 bps. A 45-bps bump is rare, and the most in eight years. If at least two other Big 6 banks...
With the spring market on deck and bond yields sliding, big banks are sharpening their pencils on 5-year fixed pricing. Today we saw BMO cut its “Smart” 5-year fixed rate by 20 basis points, from 3.49% to 3.29%. (Best BMO mortgage rates) Then we saw CIBC launch a new 3.19% 5-year for high-ratio mortgages only. (Best CIBC mortgage rates) That...
It’s not a question of whether mortgages will someday be arranged completely online. The question is, how long will it take? When we do finally get there, you’ll still be able to speak with a human advisor for mortgage help, but not in person. Not if you want the lowest rate. “We envision potentially having a better rate for online...
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