Remember the days of: VCRs Paper maps Beepers Being able to rely on banks lowering prime rate when the Bank of Canada cut its overnight rate? Well, times change. And so has the pressure on banks to grow earnings each quarter. Falling rates and a flattening yield curve have squeezed bank profitability, leading them to resort to unconventional earnings tactics....
President Trump has figured out how to get his way and force more rate cuts out of the Federal Reserve: Create trade panic. Trade wars—exacerbated last week by Trump’s latest gambit—could cost the global economy up to $1.2 trillion and pressure the Fed to cut rates more than expected. North American yield curvesinverted furtheron this news, suggesting higher probability of...
The #1 financial priority for people with a mortgage is, you guessed it, paying down their mortgage. 42% ofCanadians with mortgages say that is their topmoney goal, according to Manulife Bank’s latestCanadian Debt Survey. And it’s a number that may rise. Fuelling the Trend The urgency tobecome mortgage-free could intensify further over time, for several reasons: Mortgage Balances Have Grown:Mortgage...
Canadian mortgage rates take their cues from many things, and U.S. monetary policy is near the top of the list. That’s why today’s Fed rate cut—the first since the financial crisis—is meaningful to borrowers. Fed decisions always move Canadian rates in some respect but in this case, key questions remain. Here are the two biggest ones. How Many Cuts Are...
The Spy’s mission to arm Canadians with better rate intelligence took an exciting turn this morning. RateSpy announced that it has joined Kanetix, Canada’s insurance comparison leader. What it means for our fellow spies is faster progress towards RateSpy’s ultimate goal: equipping Canadians with powerful tools to negotiate lower rates on their mortgage. The road at RateSpy.com started a decade...
If market expectations are on the money, the U.S. Federal Reserve will drop its key policy rate on Wednesday — for the first time in over a decade. Unlike most cuts, however, this one’s arguably not as urgent. It’s more akin to preventative medicine that wards off (economic) illness before the symptoms get severe. Here’s a quick read on how...
A fourth major bank has cut its posted 5-year fixed rate today. This time it’s BMO. The move comes four long months afterthe 100+ basis-point collapse in 5-year bond yields. Such a delay in reducing posted rates after large, market-wide rate drops is unusual historically speaking, as we’veexplainedpreviously. See the chart below for more perspective. BMO’s cut today has implications...
“There’s no doubt that mortgage rate declines since the start of this year have contributed to stabilize Canada’s housing market,”said RBC economist Robert Hogue in a report last week. That might be news to some, given the rates used to qualify borrowers for approval have barely moved in 2019. We asked Mr. Hogue to share what he sees and he...
The most important rate in the mortgage industry has dropped. Better late than never. The benchmark posted 5-year fixed rate has fallen from 5.34% to 5.19%. It’s the firstchange since May 9, 2018. And it’s the first decrease since Sept. 7, 2016, despite a 106-basis-point nosedive in Canada’s 5-year bond rate since November 8. Why it Matters The benchmark rate...
Here are seven things you may not know about Canada’s mortgage market. The source: CMHC’s insightful new Residential Mortgage Industry Report. 1) Variable Rates Looked Good (Keyword Being “Looked”) Almost 3 in 10 borrowers (29%) went variable in the first quarter. That’s12 percentage points higher than two years prior. And that’s despite the historically narrow gap between fixed and variable...
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