—The Mortgage Report: Oct. 13— If you like definitive-sounding rate calls, here’s one: “The 2020 recession AND the 40-year bond rally are over,” declares Bank of America. Positive economic data surprises, declining uncertainty post-U.S. election and “massive monetary and fiscal policy support” will “set the stage” for higher bond yields, the bank stated in a report on Tuesday. If true,...
“We are not actively discussing negative interest rates at this point, but it’s in our toolkit and never say never.” Bank of Canada Governor, Tiff Macklem That comment from Canada’s monetary kahuna, Tiff Macklem, put a glimmer of hope in the eyes of variable-rate mortgagors this week. By leaving the door open to sub-zero rates, even if just a crack,...
—The Mortgage Report: Oct. 7— Toronto condo listings have exploded 215% to a record high, reports Bloomberg. And they’re projected to be even higher in October, according to HouseSigma. Driving that surprising number: skittish investors (many with negative cash flow given surging rental listings and a 14% y/y drop in rents) “elevator phobia” people coming off mortgage deferrals relatively higher...
—The Mortgage Report: Oct. 5— Upstart iBuyer, Properly.ca, announced a $100-million credit line last week from Silicon Valley investors, enough to fund its nationwide growth, says CEO Anshul Ruparell. The company’s expansion will broaden options for people who want a no-stress way to sell their existing home while they go shopping for a new one. iBuyers, as we wrote in...
Lest you think too many mimosas at Sunday brunch impacted our headline choices today, fear not. As long-time readers can attest, we don’t hype interest rate timing around here. Guessing rate direction beyond the short term can be like guessing solar flare intensity. It ain’t easy. Professional economists with big fat salaries botch rate predictions for a living. Yet, many...
—The Mortgage Report: Sept. 30— The costs you’re expected bear to carry a new mortgage have never been higher—at least based on how lenders assess you as a mortgage applicant. Rocketing home prices and a stubbornly high “stress test rate” have pushed the basic inflation-adjusted cost to carry a home (i.e., average mortgage payment + heat + property taxes) to...
—The Mortgage Report: Sept. 28— Ever wonder who’s got the most generous prepayment privileges in Canada on a closed mortgage? So did we, so we just looked in our database of 3,000+ rates to find out. It turns out that credit unions rule the roost when it comes to annual lump-sum prepayment allowances. The leaders: 30% per year: Casera Credit...
Not One and Done If you’re going to gamble on a short-term rate, you could do a lot worse than 1.29%. On a contract rate basis, that’s the lowest fixed mortgage rate Canada has ever seen. And it’s probably not done dropping yet. This latest one-year offer is available in select provinces and applies to high-ratio and insurable mortgages up...
The boom, not the slump, is the right time for austerity at the Treasury.—John Maynard Keynes (1937) Canada’s Liberal government ripped a page out of Keynes’ playbook Wednesday, promising to use “whatever fiscal firepower is needed” to rebuild the economy and recover “one million jobs.” That includes multi-billion-dollar-price-tag initiatives like extending the Canada Emergency Wage Subsidy through summer 2021, making...
Bond yields heavily influence what people pay for a mortgage. In general, the more government bond-buying there is, the lower fixed mortgage rates go. Explainer: Bond prices and bond rates (yields) always move inversely. Fixed mortgage rates are benchmarked against bond yields. Governments around the world are manipulating mortgage rates by buying their nations’ own debt. Take the U.S. Federal...
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