Here’s the latest on what we know about the banking regulator’s new mortgage stress test proposal… 12:10 p.m. ET Update OSFI has proposed a tougher minimum qualifying rate for uninsured mortgages. As planned, it will be the higher of: the mortgage contract rate plus 2%, or a 5.25% floor rate That 5.25% floor is 0.46%-pts higher than the current minimum...
For those who think the 4.79% minimum qualifying rate (mortgage “stress test” rate) is too strict, here’s a breaking update. Tweaks to the often-criticized “stress test” are back on the table. OSFI said today that it “will resume its policy work on the minimum qualifying rate for uninsured mortgages by issuing a new consultation tomorrow at noon (ET).” “OnJanuary 24,...
The Mortgage Report: April 5 Many modest-income Canadians who have never owned a home may never own a home, at least not an average home. That is, unless they can live almost anywhere (work remotely, for example), and/or they’re buying with someone else (e.g., a significant other). Here’s why… First-time homebuyers now expect to pay $433,000 on average, according to...
If you follow the real estate market—and who doesn’t nowadays?—you’ve likely noticed growing speculation about new mortgage rules. Home prices are seemingly out of control, with national average prices up a shocking 25% y/y — amid a recession no less. “Canada hasn’t had a market overheating of this scope since the late 1980s,” says RBC. A growing chorus of analysts...
The country’s largest mortgage lender was hemorrhaging market share in 2016. At the time, it was a grave worry in RBC management circles — as mortgages are a foundational business. Home loans are often the first entry into a customer’s wallet. They provide significant returns on equity and they come with high borrower retention rates (more than 90% of RBC’s...
At the time this is being written (10:45 p.m. ET March 29), the top five most popular rates on our site are floating rates. It’s the first time we’ve seen this in weeks. And those numbers are based on tens of thousands of visitor clicks. Given that fixed rates usually dominate, what does this suggest? Well, among other things, it...
Canada’s best 5-year fixed rates are now north of 1.50% — for the first time since September. The lowest 5-year fixed rate in the nation is at 1.59% (for high-ratio mortgages in Ontario only). This rate may disappear this week, given it is priced aggressively under the market considering lender funding costs. On the uninsured side, HSBC’s fixed-rate hikes on...
The Mortgage Report: Mar. 17 Fed boss Jerome Powell pledged Wednesday that he would not hike U.S. interest rates “preemptively based on forecasts.” In saying that, the Fed once again left U.S. rates unchanged. But more importantly, it left its general rate outlook unchanged, meaning a consensus of its members still project no Fed rate increases through 2023. If history...
Fixed mortgage rates look like a runaway train. Thanks to Friday’s epic jobs report, the 5-year government bond yield, a leading indicator of fixed rates, closed the week above 1.00% for the first time in a year. That coincided with a barrage of new fixed-rate hikes at the big banks. Most major banks internally elevated their fixed rates this week...
In brief Today’s Announcement:No change to rates Overnight rate:0.25% Prime Rate:2.45% (also no change; seePrime Rate) Market Rate Forecast:No BoC hikes until first-half 2022 BoC’s Headline Quote: “While economic prospects have improved, the Governing Council judges that the recovery continues to require extraordinary monetary policy support.” BoC on the Economy: “GDP growth in the first quarter of 2021 is now...
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