The Mortgage Report – June 1 Penalty Boxed: Despite a horrid mortgage market in Q2, banks still booked $5 billion in profits. But they aren’t cutting people much slack on mortgage penalties, even folks who break their mortgage early due to COVID-related income loss—as this CBC story chronicles. Banks have some great mortgage products (e.g., BMO’s Cash Account, Scotiabank’s STEP,...
The Mortgage Report – May 31 And One of Them’s Bad: If you’re rooting for lower mortgage rates, one of the following must happen: Bond yields must drop to record lows Bond yields steer fixed mortgage rates and are largely a reflection of Canada’s economic (inflation) outlook Rooting for economic pain—so mortgage rates fall—isn’t exactly a patriotic sentiment, so we’d...
The Mortgage Report – May 28 Now in the 3s: For the first time ever, a Canadian reverse mortgage provider has a 5-year fixed term under 4%. Equitable Bank announced the offer Thursday, which applies to its 5-year “Lump-sum” reverse mortgage. Equitable trimmed all of its other reverse mortgage rates by 15 bps as well. That’s a big win for...
The Mortgage Report – May 27 Shop Rates, Says Bank of Canada: “The price of a mortgage can vary a lot among lenders…You’ll most likely find a lower interest rate if you do your homework and are willing to negotiate.”—Bank of Canada The BoC Does Move Fixed Rates: It’s a misconception that the Bank of Canada only influences variable mortgage...
The Mortgage Report – May 26 Stress Test Exception: Here’s a tip for renewers. If: A) you want to switch to a new lender at renewal, and B) your mortgage closedbeforeOctober 16, 2016,and C) you haven’t refinanced since… …then some lenders let you qualify at their best 5-year fixed rates instead of at the government’s “stress test” rate (which is...
The Mortgage Report – May 25 Decade Discounts: With rates near perma-lows, according to some, people aren’t exactly lining up to lock in for 10 years. That’s especially true with penalties being so large on 10-year fixed terms, that is, until a mortgage passes its five-year anniversary—at which point the Interest Act limits penalties to three months’ interest. Nevertheless, effective...
The Mortgage Report – Weekend Edition More Sub-2% Rates: For default-insured borrowers, there’s now up to three mortgage terms in the magic 1% range, depending on your province. They include the one-year fixed, three-year fixed and variable. In coming weeks, more borrowers could strategically choose shorter fixed terms to: (a) wait for better variable-rate discounts in 2021, and/or (b) get...
The Mortgage Report – May 20 “1″-handle Rates Return: Fixed rates have once again dipped below the psychological 2% level, albeit only three-year fixed rates. It’s a threshold that, when broken, often creates incremental demand for mortgages. Normally that demand comes from refinances and purchases, but with home sales down 57% nationwide, purchases have largely dried up. Credit tightening, a...
The Mortgage Report – May 19 5% Down Payments at Risk? Canada’s housing agency says it must “avoid exposing young people” and “taxpayers” to “amplified losses that result from falling house prices.” CMHC CEO Evan Siddall said today, “Unless we act, a first-time homebuyer purchasing a $300,000 home with a 5% down payment stands to lose over $45,000 on their...
The Mortgage Report – May 16 Now to 4.94%: Scotiabank trimmed its posted 5-year fixed rate to 4.94% on Saturday. That puts the mode average of the Big 6 Banks’ 5-year posted rates—and hence the minimum stress test rate—at 4.94%. Of note: This is the lowest the stress test rate has been since October 2017 The all-time low was 4.64%,...
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