“You better be prepared to deal with rates 5% or higher. It’s a higher probability than most people think” —JP Morgan CEO, Jamie Dimon What if interest rates surged far higher and faster than you now envision? Picture this scenario for a moment: U.S. core price inflation above 3% for the first time since 1995 U.S. unemployment at 60-year lows...
Love it or hate it, Canada’s controversial mortgage stress test has led to one welcome benefit: bigger mortgage discounts. That’s due partly to slowing demand for B-20-compliant mortgages—i.e., mortgages that require borrowers to pass the banking regulator’s “stress test,” which was adopted in January. In its latest Senior Loan Officer survey, the Bank of Canada writes, “Mortgage approval rates continued...
Big news here for people wanting to switch lenders with a mortgage that was previously refinanced. Until recently, it hasn’t been possible to move your mortgage to a new lender and get ultra-low default insured rates if you had previously refinanced that mortgage.That was due to an interpretation of the insurance rules implemented by the Department of Finance in 2016....
We’re seeinggovernment bond yields approaching seven-year highs, and now this. TD has just boosted its posted 5-year fixed a whopping 45 basis points (bps) to 5.59%. Over the last decade, the average increase to posted 5-year fixed rates has been24 bps. A 45-bps bump is rare, and the most in eight years. If at least two other Big 6 banks...
New data has more than a few observers second guessing Ottawa’s latest mortgage clampdown. RE/MAX’s 2018 Spring Market Trends Report quantifies the by-products coming from one of the biggest mortgage rule changes ever, the uninsured mortgage stress test. The data beg the question, are the side effects worse than the government’s medicine? More Buyers Are Being Hamstrung One in four...
The most extraordinary thing about Canadian real estate is how it has shrugged off rule change after rule change in the mortgage market. We’ve seen governments impose over 60 housing finance restrictions since 2008, the height of the global credit crisis. These policies shrank the number of qualified borrowers and inflated mortgage costs.And yet, far from collapse, the market is...
HELOC balances appear to be surging at their fastest pace in five years—even faster than mortgages, reports Bloomberg. That’s got ever-vigilant regulators raising an eyebrow. And it’s got certain lenders we talk to expecting HELOCs to be the next area of mortgage rule tightening. Under the Microscope Currently, 2 in 5 secured residential loans in this country (roughly 3 million)...
Mortgage growth in Canada is like King Kong—it’s hard to kill. You can riddle it with bullets (mortgage rules), but it just keeps beating its chest and roaring on. More than 60 mortgage rule tightenings later (including insurance and securitization fee increases) the question is, has Canada’s mortgage market finally been shot down? Nationally, average home prices are already down...
Not exactly. One month after the mother of all mortgage rule changes, the wheels are still turning in Canada’s real estate and mortgage market. They’re just turning slower. But make no mistake, OSFI’s mortgage stress test has changed the landscape—for both borrowers and lenders. Here’s how: Fewer Mortgages Our best anecdotal guesstimate after speaking to a sampling of federally regulated...
We’re one week into 2018, OSFI’s new mortgage stress test is live and the earth is still spinning on its axis. But that axis is now tilted…in credit unions’ favour. If you’re a mortgage shopper who’s been turned down by a bank—courtesy of the aforementioned new mortgage rules—then credit unions want to talk to you. Credit unions aren’t bound by...
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