The deluge in yields continues. Canada’s benchmark 5-year yield just hit its lowest point since June. The last time we saw this kind ofcarnage was January 2015. Back then, the Bank of Canada made emergency rate cuts to stave off the oil crisis. Implied odds are slim that the bank will reverse course and lower its key rate near-term. But...
Fears of a slowing economy take rate hikes off the table, and such concerns definitely took a hike off the table today. Canada’s main rate setter, the Bank of Canada, did what most predicted and left rates as-is at this morning’s rate meeting. But the outlook did change. Here’s more on the BoC’s latest decision, and what it means to...
Something unusual has happened in the high-ratio mortgage world. Homebuyers with less than 20% equity are gravitating to floating-rates — more than ever in recent history. New data from the country’s top default insurer (CMHC) shows that almost a third of transactionally insured borrowers (31.3%) chose a variable- or adjustable-rate mortgage from July 1 to September 30. Jargon-Buster:“Transactionally insured” just...
Those who think the government went overboard on mortgage tightening may have a glimmer of hope. In a presentation Wednesday, Stuart Levings, head of Canada’s largest private default insurer, Genworth Canada, said the company will be urging policy-makers to improve housing access, particularly for younger homeowners. “The only reason we think there’s an opportunity is because it’s an election year,”...
The smart guys betting billions of dollars on interest rates are pulling back their wagers on 2019 rate hikes. (More on that, if you’re interested.) And if you believe those traders, the end of the current rate-tightening cycle may not be far off. The market is now pricing in just two more U.S. rate increases between now and the end...
So many young people want to build home equity and get out from under their landlord’s thumb. But they can’t. They don’t have the down payment to qualify for a mortgage. For many modest-income Canadians, saving up the 5 percent minimum down payment (or 20 percent if you want to avoid CMHC insurance) can take years—many, many years. While some...
Many don’t realize that there are two flavours of floating-rate mortgages: The adjustable-rate mortgage (ARM) Its payment rises and falls with prime rate The variable-rate mortgage (VRM) Its payment doesn’t change when prime rate changes The only exception is when rates soar so much that you’re not paying all the interest. Then the payment generally rises to cover the interest...
So are a lot of other people. So far, all we’ve gotten is a dozen large or mid-sized lenders hiking 5-year fixed rates over the past week or so. Meanwhile, the 5-year swap yield (one of the best leading indicators for fixed mortgage rates) is back down to levels it saw six months ago. Back then (in May), the best...
Few lenders in Canada are adapting better to online mortgage lending than HSBC. Thanks to league-leading rates and strong online marketing, the bank’s mortgage growth continues to outpace big banks. Since we last checked in with HSBC it’s been up to something interesting—something that foreshadows the future of how lenders sell mortgages in this country. The “Mortgage Centre” Mortgage shoppers...
Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...
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