It turns out TD Canada Trust’s “market-moving rate cut” won’t be so market moving, at least not yet. On Sunday, TD slashed a number of fixed rates on its website. Today it un-slashed them, saying: “Changes to our posted rates on our website were made in error. We apologize for any misunderstanding and please refer to the rates currently posted.”—TD...
The two top policy-makers in Canada’s mortgage market don’t seem to be on the same page—at least not with what they’re feeding the public about the mortgage “stress test.” Observe these two statements about why the stress test—which is part of banking regulator OSFI’s contentious “Guideline B-20″—was implemented: Bill Morneau, Minister of Finance: “…We wanted to make sure that [home]...
In a speech last week, Canada’s banking regulator brushed off the “unintended consequences” of its controversial mortgage stress test with one sententious comment: “…The answer to this important problem…cannot be more consumer debt, fuelled by lower underwriting standards.” — OSFI Assistant Superintendent Carolyn Rogers She could not have been more right. More slack in “underwriting standards” was the last thing...
Never before has Canada’s banking regulator received so much pushback on a mortgage rule. OSFI has felt such heat from its controversial “B-20” stress test, that it’s started a campaign to defend its position—e.g.,this speechlast Tuesday (video) and this one last Thursday. From that and from what we know of regulators’ non-public comments, one thing appears clear. The government has...
Reuters reported Friday that regulators were considering drastic new restrictions on private lending. But given the newswire’s anonymous sources, no one has been able to validate the reporter’s claims. We’re now hearing that Mortgage Professionals Canada President, Paul Taylor, spoke withthe Ministry of Financeabout the article on Friday. According to an internal memo at MPC, a senior policy advisor at...
Imagine if 250,000 to 350,000+ homeowners couldn’t get cost-competitive private mortgages anymore. That’s the potential result if the feds impose a mortgage stress test on private borrowers. And they’re considering just that, according to a Reuters report today. At this point there are more questions than answers, like does this apply just to mortgage investment corporations (MICs) or to all...
Few years have altered the mortgage landscape like 2018. Canada experienced what is arguably the biggest mortgage rule change of all time (OSFI’s B-20 and its “stress test”). It was a policy that hammered mortgage growth to almostthree-decade lows, slashing buying power over 20% for uninsured mortgagors and forcing roughly 1 in 7 borrowers to change or abandon their mortgage...
Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...
We’ve said it many times over. OSFI’s imposition of a stress test on borrowers switching lenders is potentially the most short-sighted government mortgage policy in Canadian history. See: “Mortgage Renewals Now More Costly — For Those Least Able to Pay“ The policy keeps borrowers—who have proven their ability to handle their mortgage—from switching lenders to reduce their interest bill. These...
Fixed mortgage rates are rising all around us. The latest players to move areRBC, BMO and NBC. Each of them hiked fixed rates this morning.(The latest bank mortgage rates.) What they didn’t raise was the 5-year posted rate. That matters because big bank posted rates are used to qualify roughly 9 out of 10 mortgage borrowers in this country. They...
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