The difference between a lender’s cost to lend for 10 years versus five years is near an all-time low. Yet,10-year ratesremain too high to attract much interest. This chart below is one example of how competitive basic 10-year funding costs have become. It shows a long-term view of Canada Mortgage Bond (CMB) yields. Lenders use CMBs to fund insured 5-...
For two years, the federal government and regulators have been talking up the virtues of their mortgage stress test. So, imagine the surprise today when the Prime Minister asked the Minister of Finance to: “Review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.” The request came in a mandate letter sent by Trudeau’s...
Rates are breaking out. Canada’s widely watched 5-year bond yield just hit a seven-month high. That’s typically bullish for fixed mortgage rates. Trendsetter RBC wasted no time this morning. It ran a press release announcing it was boosting 3-, 4- and 5-year fixed rates by 10, 20 and 20 bps, respectively. RBC doesn’t usually issue press releases when it’s merely...
Five-year fixed rates have dominated consumer mindset all year, but that dominance may start waning in 2020. If you believe unemployment has bottomed out in this country, and you believe an inverted yield curve is rate-bearish, and you’re a financially secure borrower, you’re probably going to steer clear of a 5-year fixed. Instead, you might focus on terms that cost...
Canada just witnessed its worst spike in unemployment since the Great Recession of 2009. An estimated 71,200 jobs were lost in November. And we all know what happens when unemployment bottoms and starts climbing. Rates usually drop. Is This Really the Bottom in Unemployment? No one knows what tomorrow will bring (until tomorrow).But here’s what we know: Economic cycles have...
The Bank of Canada ended 2019 where it ended 2018, with prime rate frozen at 3.95%. Here’s a summary of the Bank of Canada rate decision this morning: Rate Announcement:No change Overnight rate: Remains at1.75% Prime Rate: Remains at 3.95% (seePrime Rate) Market Rate Forecast:One rate cut in 2020 BoC’s Headline Quote: “Future interest rate decisions will be guided by…the...
With just 12 days until Tariff Man’s next round of threatened tariffs kick in against China, and with new import taxes now threatened on Europe and South America, the market pendulum has swung back to pessimism. “If tariffs scheduled for Dec. 15 are implemented, it would be a huge shock to the market consensus,” Manulife Investment Management’s Sue Trinh told...
It’s become easy to move your money from one financial institution (FI) to another online. Major banks hate it. Small FIs love it. The internet lets upstarts swipe market share from the big boys with little more than a great rate and some media coverage.It’s a formula that will increasingly siphon deposits from well-capitalized household names (the Big 6 Banks)...
Most big banks now have online mortgage pre-approvals. No news there. But three decades following the invention of the world wide web, big banks still don’t let you get a mortgage: on virtually any smartphone, tablet or computer without ever speaking to a banker with an instant credit check with automated screening of your application data with an industry-leading, fully...
Savings account rates are not usually our playground. But when a bank launches a savings rate that’s 43 basis points above the typical 5-year fixed mortgage rate, it’s worth a comment. Laurentian Bank of Canada (LBC) is the party in question. It has a new eye-catching3.30% high-interest savings account (HISA) rate with no regular fees or strings attached. Here are...
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