A scattering of lenders are starting to warn of impending rate increases. No surprise—given Canada’s 5-year bond yield, which drives fixed mortgage rates, hit a new relative high on Thursday. At 0.60%, it’s now the highest it’s been since April 9, 2020. When the 5-year yield was last at these levels, your typical discretionary 5-year fixed rate at a Big...
—The Mortgage Report: Sept. 28— Ever wonder who’s got the most generous prepayment privileges in Canada on a closed mortgage? So did we, so we just looked in our database of 3,000+ rates to find out. It turns out that credit unions rule the roost when it comes to annual lump-sum prepayment allowances. The leaders: 30% per year: Casera Credit...
The debate over fixed or variable rates never ends. But there are now two things that are far less debatable: 1) The Bank of Canada is telling us that prime rate has likely hit bottom, and 2) “Safer” 5-year fixed rates are now as low as “riskier” variable rates. (Safer, particularly if you choose a fair penalty lender.) Given the...
—The Mortgage Report: Saturday Edition— The Readvanceable Shuffle: Got a fixed rate above 3% in a readvanceable mortgage? Does your lender let you lock in the HELOC portion to a low-cost short-term fixed rate? If so, here’s a tip that might save you some interest. Jargon Buster: A “readvanceable mortgage” is one that has a regular amortizing mortgage linked to...
—The Mortgage Report: July 22— Rate Influencers: When people ask, “What’s the best rate?” most just want you to reel off a number with minimal complexity. Many don’t realize all the elements that determine mortgage pricing. That’s why it’s almost impossible to spit out an accurate quote on the fly. If you want a standard 5-year fixed, for example, factors...
—The Mortgage Report: July 21— A Seldom-used Strategy: Usually, it doesn’t make sense to buy default insurance on your mortgage if you have a big down payment. But there are exceptions, like when you have 35% equity and the difference between insured and insurable mortgage rates is 15 basis points or more. In those infrequent cases, you end up saving...
— The Mortgage Report : June 18 — For Better or Worse: When you take a bank’s 5-year fixed you’re married to it for half a decade. That is, unless you file for divorce, so to speak (i.e., discharge or transfer the mortgage to a new lender early). But as unwedded people find out, splitting up has a financial price....
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...
More than 4 out of 5 borrowers stay with their bank when their mortgage renews. And of all the reasons to do so, the least valid is probably this:because they want to keep all their finances at one institution—for “convenience.” Some people like that their mortgage payment comes out of their bank account automatically each month — that they can...
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...
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