Mortgage shoppers ask this question all the time. It’s useful information if you’re trying to discern variable rate trends. While the answer is convoluted, below is some insight into how variable-rate discounts are formed and why they change. Setting the Discount Most of the time, lenders price closed variable mortgage ratesat a discount from their prime rate. There are two...
Two-thirds of consumers expect interest rates to rise in the next 12 months, according to a new report from Mortgage Professionals Canada. Only a measly 2% expect rates to fall. But that’s not as surprising as it seems. There is a built-in bias towards higher rates and there has been for years. “Through the entire history of this question, Canadians...
The “neutral rate” has taken on a life of its own. The Bank of Canada is talking about it, analysts are talking about it, the media is talking about it and everyday mortgagors are talking about it. Millions of Canadians, us included, use it as reference when trying to estimate how high rates might go. But the neutral rate is...
The variable-rate market just got a shade more interesting. TD has announced that, effective tomorrow, its 5-year variable rate drops from 2.90% to 2.75%. That’s equivalent to TD mortgage prime minus 1.10%. (In case anyone forgot, TD’s mortgage prime is 15 basis points higher than other banks’ prime rates.) “Canada’s housing market continues to fluctuate, and rates continue to rise,”...
Despite higher rates, a healthy slice of our population is staying open minded to variable mortgage rates. A CIBC poll today finds that: 72% of Canadians expect rising interest rates over the next 12 months (26% think they’ll stay the same) An overwhelming 83% of Canadians favour “predictability and stability over risk” when it comes to their finances (unsurprisingly) 77%...
AbsoTrumpingLutely. The more useful question is, what are the chances it will? Economists project Canada’s economy could shrink 1.8% in 2020 if the U.S. pushes us into a global trade war. In that case, we’d fall into recession in late 2019 or early 2020, they say. Canadian exports would dive, partly due to U.S. tariffs making our goods too expensive...
Prime – 1.00% is a primo mortgage rate. No question about it. Yet, there are people complaining that it’s not the “prime minus one” of old. Prior to January 2015, critics point out, prime rate was 200 basis points (bps) above the Bank of Canada’s key lending rate. Now, banks have pushed this margin to 220 bps. The fatter this...
The big fella, RBC, has come to play with its very ownprime – 1.00% offer. So has CIBC, according to our branch contacts.(CIBC’s official comment is that, “Our posted rates…have not changed,” but that says nothing about its discretionary rates, which are lower. Spokesperson Jason Wesley suggests people “speak to a financial advisor” to get a quote.) It’s been years...
“Rate war” is a cliché in this business. But that’s exactly what we’ve now got in the variable-rate mortgage market. BMO started it all with its record-setting prime – 1.00% offer. TD then promptly matched. Now we’re hearing from Scotiabank branch sources that it’s offering prime – 1.00% as well — but only for newclient applications and not for refinances...
One week ago BMO stunned competitors with arecord variable-rate discount. Now, one of its juggernaut competitors—TD—is responding. TD has just matched BMO’s special with its own prime – 1.00% offer (“TD prime” – 1.15%, to be exact). That ties BMO for Canada’s lowest variable rate on an uninsured mortgage. Remember, uninsured rates are required if you’re refinancing, buying a home...
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