By The Spy on
March 12, 2016
The latest mortgage rate reconnaissance… Prime Sticks at 2.70% Poloz and Co. issued another snoozefest rate announcement this week. The BoC delivered the same narrative we’ve heard for months: Canada’s economy is tenuous, U.S growth is positive, upside inflation risk is limited, federal stimulus may obviate the need for near-term rate cuts, debt and housing risk are at Defcon 5,...
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By The Spy on
March 6, 2016
This Week in Rates The big promo launched this week was CIBC’s 4-year teaser special. You get 1.99% for the first nine months and 2.83% for the next 39 months, for a 2.69% APR. But does anyonereally likea tease? Compare this offerto4-year terms at 2.39% or less, which havebetter penalty provisions to boot. Teasers rarelymake sense unless: a) the APR...
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By The Spy on
February 24, 2016
Don’t pop the Dom Pérignonjust yet, but rates on Canada’s most popular term—the 5-year fixed—havedroppedin the lasttwo weeks. And it’s hightime they did. Government bond yields have trendedbelow their three-month average since December. (Bond yields and mortgage rates have a cozy relationship since lenders commonly price fixed mortgages against bond rates.) As usual, the Spy’s crack intelligenceteam brings you the...
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By The Spy on
February 13, 2016
It got sort ofugly out there this week.Oil prices sank to dozen-yearlows, swap rates(which guidefixed mortgage rates) fell torecord depths and stocks tanked, before eventually recovering. Often times, market action like thisleads to cheapermortgages. But these days lendersaren’t about to drop their pants on rates.They have other problems. Investors are gettingscared. Check out this measure of credit riskin the interest...
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By The Spy on
February 10, 2016
It finally happened. After a year of bouncing off the 0.50% range, the 5-year government bond yield finally closed below it. The last time that happened was…never. Canada’s 5-year government yield (which guides fixed mortgage rates) closed even lower than the Bank of Canada’s overnight target. In other words, the rate to lend for five long years is less than...
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By The Spy on
January 26, 2016
It’s fashionable to be negative these days. To have anegative yield, that is. Since 2012, it’s been increasinglycommon forgovernment bonds to have interest rates (yields) below zero. Not only are investors inthose bonds earning no return, they’re actuallypayingto save—i.e., paying for governments to hold their money safely. Mortgage Implications Global yieldsmatter in a mortgage context because fixed rates are closely...
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By The Spy on
January 13, 2016
It’s been sixwhole days since RBC unexpectedlyhiked mortgage rates, encouraging aherd of banks to follow its lead. But my oh my,how things can change in just oneweek. Interest rates outside the mortgage market haveplummeted and rates areabout to change…again. That’s got many thinking RBC’s rate hikes were just a blip (at least for fixed rates). If you’re a mortgage shopper,...
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By The Spy on
January 5, 2016
Mega-lender RBC announced today that it is raising 2- to 5-year fixed rates by 10 basis points and variable rates by 15 bps. (A basis point is 1/100th of a percentage point.) Is this a practical joke? RBC is lifting mortgage rates despite 5-year bond yields nearing four-month lows? That’s what many may be asking, but this is no joke....
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By The Spy on
December 17, 2015
Here are five things to know about Wednesday’s1/4% U.S. rate hike: It’s over and done with, and it’s about time. Talking heads haveyacked about the start of Fed tighteningfor years now. Meanwhile, the big event finally happened yesterdayand bond yields (which guidefixed mortgage rates) barely moved. Yes, the Fed’s actionscould push up Canadian long-term rates somewhat,out ofsympathy alone. But ultimately...
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By The Spy on
December 14, 2015
As we turn the page on 2015, get ready for a host of new mortgage trends inthe next 12 months.We’ll seenew down payment rules, moretalk of negative interest rates, and surprising moves withbond yields. Analysts are already making their predictions on how mortgage shoppers will be affected.Here’s a glimpse of what they’re saying now: On Higher Down Payments Lastweek the...
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