The Mortgage Report – May 31 And One of Them’s Bad: If you’re rooting for lower mortgage rates, one of the following must happen: Bond yields must drop to record lows Bond yields steer fixed mortgage rates and are largely a reflection of Canada’s economic (inflation) outlook Rooting for economic pain—so mortgage rates fall—isn’t exactly a patriotic sentiment, so we’d...
The Mortgage Report – May 28 Now in the 3s: For the first time ever, a Canadian reverse mortgage provider has a 5-year fixed term under 4%. Equitable Bank announced the offer Thursday, which applies to its 5-year “Lump-sum” reverse mortgage. Equitable trimmed all of its other reverse mortgage rates by 15 bps as well. That’s a big win for...
The Mortgage Report – May 25 Decade Discounts: With rates near perma-lows, according to some, people aren’t exactly lining up to lock in for 10 years. That’s especially true with penalties being so large on 10-year fixed terms, that is, until a mortgage passes its five-year anniversary—at which point the Interest Act limits penalties to three months’ interest. Nevertheless, effective...
The Mortgage Report – May 20 “1″-handle Rates Return: Fixed rates have once again dipped below the psychological 2% level, albeit only three-year fixed rates. It’s a threshold that, when broken, often creates incremental demand for mortgages. Normally that demand comes from refinances and purchases, but with home sales down 57% nationwide, purchases have largely dried up. Credit tightening, a...
Mortgage Report – Weekend Edition Prices Tumble in April: The national average home price in Canada has plunged almost 10% in one month (April). That’s never happened before in CREA data going back to 1980. The next closest month-over-month drop was -7.6% in April 1989. The data was skewed partly by the GTA’s 11.8% nose-dive. Home Inventories Skyrocket: The total...
Mortgage Report – May 11 Hitting Triples: Borrowers would love to see 5-year fixed rates under 2% and eventually they’ll get there. But for now, banks are “reducing mortgage rate discounts to conserve profitability,” as Deloitte put it in a recent report. Alas, we’ll have to make do with the historically low rates we already have. And for all you...
Daily Mortgage Report – May 8 Unemployment Surprise: Unemployment is a key determinant of home prices. And while it may seem hard to put a record 2 million lost jobs (StatsCan’s estimate for April) in a positive light, when economists were predicting double that amount, it’s a relief. Canada’s unemployment rate surged to 13%, near the highest in modern data...
Tiff Gets the Nod: Canada’s most important banker will soon be Tiff Macklem. Effective June 3, he’s taking over for Bank of Canada Governor Stephen Poloz. We’ll hear Macklem at BoC rate announcements for the next seven years and already he’s moving markets. Following his appointment Friday, he spoke of: downside risks to the economic recovery the fact that negative...
9:09 p.m. Update Southbound Fixed Rates: Lender after lender has announced fixed-rate drops this week. And with Canada’s 5-year yield closing at a record low today, it’s no coincidence. It was the first time ever that our 5-year bond closed below 0.40%. Prerequisite for Recovery: “…We need monetary stimulus to reach the ultimate borrower,” said BoC chief Stephan Poloz today....
TD Canada Trust rate cuts: Special fixed rates drop from: 3yr: 2.99% to 2.89% 5yr (high ratio): 2.99% to 2.79% Posted rates drop from: 1yr fixed: 3.59% to 3.44% 2yr fixed: 3.74% to 3.54% 5yr variable: 2.65% to 2.35% (P – 0.25%) Every time a bank cuts 1- and 2-year posted rates, it raises the chances of customers paying bigger...
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