The 2020s won’t be the decade to lock into a long-term fixed mortgage, not if you believe RBC Economics. It’s projecting just 1.7% annual economic growth for the next 10 years, give or take. That’s roughly a full point less than before the Great Recession. At 1.7% GDP, there’s generally very little reason for rate hikes. Quite the opposite, RBC...
The difference between a lender’s cost to lend for 10 years versus five years is near an all-time low. Yet,10-year ratesremain too high to attract much interest. This chart below is one example of how competitive basic 10-year funding costs have become. It shows a long-term view of Canada Mortgage Bond (CMB) yields. Lenders use CMBs to fund insured 5-...
Rates are breaking out. Canada’s widely watched 5-year bond yield just hit a seven-month high. That’s typically bullish for fixed mortgage rates. Trendsetter RBC wasted no time this morning. It ran a press release announcing it was boosting 3-, 4- and 5-year fixed rates by 10, 20 and 20 bps, respectively. RBC doesn’t usually issue press releases when it’s merely...
Five-year fixed rates have dominated consumer mindset all year, but that dominance may start waning in 2020. If you believe unemployment has bottomed out in this country, and you believe an inverted yield curve is rate-bearish, and you’re a financially secure borrower, you’re probably going to steer clear of a 5-year fixed. Instead, you might focus on terms that cost...
Canada just witnessed its worst spike in unemployment since the Great Recession of 2009. An estimated 71,200 jobs were lost in November. And we all know what happens when unemployment bottoms and starts climbing. Rates usually drop. Is This Really the Bottom in Unemployment? No one knows what tomorrow will bring (until tomorrow).But here’s what we know: Economic cycles have...
With just 12 days until Tariff Man’s next round of threatened tariffs kick in against China, and with new import taxes now threatened on Europe and South America, the market pendulum has swung back to pessimism. “If tariffs scheduled for Dec. 15 are implemented, it would be a huge shock to the market consensus,” Manulife Investment Management’s Sue Trinh told...
There’s no industry-wide data on this, but whenever prime rate starts climbing, lenders tell us that at least 1 in 20 variable-rate borrowers lock in (convert) their variable rate to a fixed rate.And a good number of those borrowers are getting one stinkybum biscuit of a rate. One poor mortgagor I spoke with recently asked his lender to lock in....
Some people think we’re in a bond market bubble. If that’s true, and we’re not declaring it is, the last four days are kinda what you get when a bubble pops. Bond investors are in a momentary state of panic. Canada’s bellwether 5-year government yield has catapulted 31 basis points in just four trading days. The last time that happened...
Knowing the future wouldn’t help you pick the right mortgage. Unless you knew allthe future. Imagine a fantasyland case where it was 100% certain that all mortgage rates would be higher in five years. With that priceless information most people would take a 2.49% five-year fixed over a 2.59% one-year fixed. But initial rates and ending rates are only two...
Any creditworthy mortgage shopper is practically guaranteed to get a better rate today than they could have at the start of the year. Fixed mortgage rates have been on a ski slope this year, sliding to two-year lows this month. If you’re wondering how far they’ve tumbled, here’s a look. These were the best widely available 5-year fixed rates, as...
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