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...
“Lower for longer” has become the mantra in the rate market. But mantras don’t last forever. Trump is a rate market shock. He has single-handedly transformedhow investors perceive North American growth prospects, inflation and default risk in the U.S. bond market. That’s driven Canada’s bellwether 5-year bond yield near one-year highs. Combine this with Ottawa’sregulatory changes, and suddenly today’s record-low...
“Young folks with mortgages regularly thank me for keeping interest rates low.“ —Bank of Canada Governor, Stephen Poloz In fact, Mr. Poloz’s decisions to keep rates low have practically been made for him, by serially disappointing economic data. Monetary policy has merely reacted to what he terms “a steady decline in the potential growth rate of the economy.” The...
Economic events that could move your mortgage rate, in no particular order… Frisky Fiscal Stimulators “…The bond market would react very badly to a sudden move to fiscal easing.”—J.P. Morgan Monetary policy isn’t working so well. Interest rates around the developed world are either negative or near-zeroand still growth is stuck in a rut. That’s got some experts looking tofiscal...
“What the inflation market is currently pricing is an incredibly benign inflation trajectory in the next 10 to 20 years.” Martin Hegarty, head of BlackRock’s inflation-linked bond portfolio in New York, told that to Reuters this week in a story entitled Markets predict decades of inflation frustration. “We are pricing a…rate that implies the Fed will miss its inflation target...
Brexit Fallout: Non-Radioactive (So Far) It’s been 12 days since Britain voted to cancel its EU membership. That news dropped a bomb on the market but thankfully it wasn’t nuclear. So far, the pundits have brushed off any adverse effects for Canada. But dismissing Brexit’s impact on mortgage rates would be premature. For one thing, it will continuecausing insecurity among...
Traders around the world had their bets in the wrong place. They thoughtthat the UK would stay in the European Union. But in a cliffhanger vote, Brits decided otherwise. Now the world is realizing just what a big deal this is (see BMO’s note). For the UK, the world’s 9th biggest economy, ramifications include a historic collapse in the pound,...
Borrowers have been blessed with mortgage rates that look like promotional savings rates: 1.99%, 2.25% and the like. But now, sadly, those rate bargains are in jeopardy, at least for a while. The tide of bond yields is rising, and when that happens, so go fixed mortgage rates. Five-year fixed rates below 2.34% may be on the endangered species list,...
An Idle Bank of Canada If you forgot about the Bank of Canada rate meeting yesterday, you’re one of many. Nobody made a big deal about it because nobody expected anything earth shattering fromPoloz’s lips. The takeaway is that prime rate remains stuck at 2.70% and it could stay that way for months. The Bank did liftits Canadian growth estimate,...
It got sort ofugly out there this week.Oil prices sank to dozen-yearlows, swap rates(which guidefixed mortgage rates) fell torecord depths and stocks tanked, before eventually recovering. Often times, market action like thisleads to cheapermortgages. But these days lendersaren’t about to drop their pants on rates.They have other problems. Investors are gettingscared. Check out this measure of credit riskin the interest...
log in
