A Two-Month High for the 5-year Yield Canada’s #1 fixed mortgage rate indicator, the 5-year bond yield, has stubbornly refused to challenge its March record low. And now it has turned upwards, closing Thursday at the highest level in two months: 0.44%. Concerns over inflation and massive government debt issuance are two key reasons. A close above 0.55% could indicate...
—The Mortgage Report: Aug. 4— Historic 5-year Yield: On Tuesday the U.S. 5-year Treasury traded just 19 basis points above zero—where it’s never been before. If it drops a smidgen lower, that could be enough to drag Canada’s 5-year yield (and hence, 5-year fixed mortgage rates) to record lows as well. Stay tuned. Setting the Pace: Tangerine now has the...
—The Mortgage Report: July 31— Snapping Up Bonds: Fixed-rate mortgage shoppers dreaming of lower rates better hope for lots of bond buying in the months to come. And that’s what we’re getting from the Bank of Canada. The BoC is buying a lot of 5-year bonds, which heavily influence 5-year fixed mortgage pricing. Under theGovernment of Canada Bond Purchase Program...
—The Mortgage Report: July 29— Decade Rates at All-time Lows: In Ontario, folks can now enjoy borrowing cost certainty for a tenth of a century, at effective rates as low as 2.59% through brokers. 10-year fixed rates have literally never been lower. Most borrowers wouldn’t think of paying 50+ basis points more (on top of a 5-year fixed) to get...
—The Mortgage Report: July 7— Price Expectations vs. Reality: “…Consumer expectations for house price growth in Canada dropped to zero,” according to a BoC survey released yesterday. But the data is about a month and a half old. Since then, home prices in the Greater Toronto Area have broken their 2017 record high. Imagine where prices would be if employment...
—The Mortgage Report: June 24— We Just Got Downgraded: The government is spending too much and it’s caught up with them. Our record quarter-trillion deficit worried Fitch, a ratings firm, enough to cut Canada’s credit rating today. “Pandemic lockdown measures and depressed global oil demand will cause a severe recession of the Canadian economy,” it says. Fitch projects Canada’s consolidated...
—The Mortgage Report: June 19 — Long-term Money on Sale: If you’re willing to commit to a decade-long term, and you live in Ontario, you can now do it for less than at any time in history. 10-year fixed rates are now as low as 2.79% (an effective rate including cash back) for well-qualified borrowers in Ontario. Outside of Ontario,...
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...
Sub-1% Rates: One of the greatest economic tragedies in Canada’s history is unfolding before our eyes. When we talk about how low mortgage rates are, it can’t be stressed enough that no one wanted this to be the reason for it. But if there’s one silver lining, it’s variable-rate borrowing costs. 1 in 5 borrowers took out a variable-rate mortgage...
Despite rates being less than a point from their all-time lows, borrowers are growing increasingly dissatisfied with shrinking mortgage discounts. In the last month, typical 5-year fixed rates have surged 45+ basis points and variable discounts (from prime rate) have decreased by 75+ bps. That’s due mainly to temporary “risk premiums.” In other words, lenders are charging borrowers more because...
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