If you’ve watched mortgage rates for a long time, you know how unnatural this is. The rate on a mortgage with five full years of locked-in interest expensecosts less than the rate on a non-guaranteed floating mortgage with interest risk. In fact, that difference (spread) is the lowest it’s been in decades, based on deep discount rates offered to well-qualified...
The gap between the best 5-year fixed rates and best variable rates is the smallest its been in two and a half years. We’re talking less than 1/8th of a percentage point between them. Depending on the equity a borrower has, folks can even find 5-year fixed rates that are below the best variable rates. What’s Provoking It One reason...
There’s an increasingly ominous vibe to Canada’s economic outlook, and that’s got the market taking rates down another notch. Canada’s5-year bond yield is seven basis points lower today—to 1.63% as we write this. That’s the lowest it’s been since December 2017.All told, the 5-year yield has now sank 83 basis points since the November high. With the Bank of Canada...
A regular consideration when choosing between a fixed or variable rate is the difference between them. As of late that “fixed-variable spread,” as we jargony industry people call it, has been slowly narrowing. So far, it has mostly been a result of diminishing variable-rate discounts. Just this morning, for example, TD hiked its advertised variable rate a head-turning 20 bps....
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...
Despite higher rates, a healthy slice of our population is staying open minded to variable mortgage rates. A CIBC poll today finds that: 72% of Canadians expect rising interest rates over the next 12 months (26% think they’ll stay the same) An overwhelming 83% of Canadians favour “predictability and stability over risk” when it comes to their finances (unsurprisingly) 77%...
The market is betting on rates heading higher this Wednesday. That’s bad news for mortgage shoppers. Or is it? One could argue that a rate hike on July 11 makes the fixed or variable rate decision even easier. Essentially the Bank of Canada is doing mortgage shoppers a favour. Here’s why… Closer to the Finish The higher rates go, the...
“We cannot withstand a trade war with the United States” – Rona Ambrose. When over 70% of your exports go to one country, and that country’s representativessay,“There’s a special place in hell,” for your Prime Minister, that’s a problem. This is what the state of relations has come to between two of the world’s closest allies. Given Trump’s tendency to...
Here’s the latest on today’s Bank of Canada rate announcement: Rate Decision:No change in rates Prime Rate:Remains at 3.45% Market Rate Outlook:Two more hikes in 2018 BoC GDP Outlook:2% growth in 2018 and 2019; 1.8% in 2020 BoC Statement:Click here The Money Quote: “…Developments since April further reinforce Governing Council’s view that higher interest rates will be warranted to keep...
Rising rates and new mortgage regulations aren’t enough to scare nearly 1 in 4 Canadians. That’s how many plan to buy a home within the next year. This comes from a new BMOsurvey, which also found the national average price buyers expect to pay is about $474,000. That jumps to $580,000 in Toronto and $603,000 for Vancouver buyers. Most concerning...
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