Bond yields are plummeting globally as the coronavirus spreads to South Korea (833 cases), Italy (215 cases) and Japan (154 cases), among other countries. Media outlets are increasingly using the “P” word (pandemic), and the more they do, the more yields will drop. Even though we have just 9 cases so far, Canada is not an island in this crisis....
Some experts downplayed the effects of the new mortgage stress test last week. The roughly 3% improvement in home-buying power—a result of the government lowering the qualifying rate—apparently didn’t impress them. And while we’re loath to overplay the new stress test’s significance, it seems that some analysts’ attempts to quantify the housing impact may be lacking. Quick Explainer:Mortgage borrowers must...
The Department of Finance today announced changes to Canada’s benchmark qualifying rate, a key component used in stress-testing insured mortgages. The new benchmark rate will come into effect on April 6, 2020. It means insured borrowers (including those buying with less than a 20% down payment) will have to prove they can afford a monthly payment based on a rate...
Don’t worry about the nagging side effects from the federal mortgage stress test. You might have heard about them in the media, but based on recent statssharedby the banking regulator, they’re overblown. Nothing to see here… Well, actually, there is more to see. OSFI’s latest assertions raise just as many questions as answers. Here were six points from its January...
TD has become the first Big 6 bank to lower its posted 5-year fixed rate since July 2019. The move comes amid plunging bond yields and just 11 days after the banking regulator (OSFI) essentiallyblamed banks for keeping posted rates too high. By doing so, banks haveinflated the federal mortgage qualifying rate, makingit unnecessarily difficult for borrowers to pass the...
Here’s some good news for people who’ve been blocked from qualifying for a mortgage due to the government’s “stress test.” Canada’s banking regulator (OSFI) is taking a second look at the mortgage stress test calculation, which requires borrowers who are not default insured to prove they can afford a monthly payment at the greater of: (A) Their actual mortgage rate...
The popularity of fixed mortgage rates in 2019 was unmistakable. But the Bank of Canada may have moved the needle for variable rates with its comments Wednesday. Below are the week’s top 10 statements from the BoC, all of which will be of interest to any serious rate watcher. The below quotes come from Bank of Canada Governor Stephen Poloz...
Compared to the chilling regulatory news of 2018 (i.e., the launch of OSFI’s mortgage stress test), this was a year of turnarounds in the mortgage market. For one thing, the year ended with palpable optimism in the housing sector. It was a degree of bullish sentiment that many didn’t think we’d see when 2019 began. Below we recap that and...
For two years, the federal government and regulators have been talking up the virtues of their mortgage stress test. So, imagine the surprise today when the Prime Minister asked the Minister of Finance to: “Review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.” The request came in a mandate letter sent by Trudeau’s...
On Monday night we’ll find out which “housing affordability”plan Canada gets, be it from theConservatives, Liberals or NDP. All three parties are promising to put homes more within reach, particularly for first-time buyers. Some of their proposals are merely vote bait; some are genuinely productive. After listening to the rhetoric for weeks on end, we’ve formulated three observations. Here are...
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