The country’s largest mortgage lender was hemorrhaging market share in 2016. At the time, it was a grave worry in RBC management circles — as mortgages are a foundational business. Home loans are often the first entry into a customer’s wallet. They provide significant returns on equity and they come with high borrower retention rates (more than 90% of RBC’s...
Despite record-low short-term interest rates, most banks are offering junk 1-, 2- and 3-year rates on uninsured mortgages through the broker channel. We’re seeing 5-year variable pricing as low as 1.45% or less at major banks. Yet, on a one-year fixed, for example, they quote mortgage brokers over 2.40%. That’s well above the discretionary rates bank customers are reporting to...
Variable rates on new mortgages could get a little cheaper this quarter, for one of four reasons, or maybe all four: Bankers’ acceptance (BA) rates — a general proxy for variable-rate funding costs — are at an all-time low. That’s boosted the spread between prime rate and BAs to almost a 12-year high. Think of that spread as a rough...
—The Mortgage Report: Dec 7— HSBC’s 0.99% variable-rate special remains the talk of the industry. Consumers have noticed, too. Online mortgage searches are up nearly 50% in the last week, according to Google Trends. Here’s more of the latest on HSBC’s headline-making offer: January 3, 2021, is officially the last day to apply, according to HSBC’s terms and conditions. It’s...
Not One and Done If you’re going to gamble on a short-term rate, you could do a lot worse than 1.29%. On a contract rate basis, that’s the lowest fixed mortgage rate Canada has ever seen. And it’s probably not done dropping yet. This latest one-year offer is available in select provinces and applies to high-ratio and insurable mortgages up...
—The Mortgage Report: Sept. 2— Here’s something that baffles even experienced financial professionals. The U.S. stock market is exploding to all-time highs while bond yields trudge near record lows. It’s a question investors are asking all the time: are stocks signalling a growth recovery that will lift yields higher? The mortgage relevance is clear: if U.S. yields pop, so do...
—The Mortgage Report: Aug. 7— Rate Complacency When you survey people about the direction of interest rates, they consistently expect “that rates will rise,” says Mortgage Professionals Canada (MPC) in a new report. That thinking is partly why 5-year fixed rates are so popular. But MPC’s recent survey indicates “that the expected amount of increase might be the smallest we’ve...
—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 – June 5 Big Drops from HSBC: The online mortgage juggernaut keeps shaking competitors’ trees. This time with Canada’s lowest bank-advertised 5-year fixed rate ever, according to our records. It’s also the first bank to crack the 2% barrier on a 5-fixed, albeit it’s for default-insured mortgages only. HSBC’s move not only reflects historically low funding costs,...
At long last a Big 6 bank has cut its advertised 5-year fixed rate. RBC set the trend today in lowering its “special offer” 5-year fixed rate by 15 basis points, from3.89% to 3.74%.(See: RBC mortgage rates) It only took a month and a half afterfive-year bond yields fell enough to warrant a rate cut. (Bond yields typically guide fixed-rate...
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