Categories for Mortgage Rate Trends

Don’t Trust Prime Rate

Remember the days of: VCRs Paper maps Beepers Being able to rely on banks lowering prime rate when the Bank of Canada cut its overnight rate? Well, times change. And so has the pressure on banks to grow earnings each quarter. Falling rates and a flattening yield curve have squeezed bank profitability, leading them to resort to unconventional earnings tactics....

Canadian Rates Plunge to Two-Year Low

President Trump has figured out how to get his way and force more rate cuts out of the Federal Reserve: Create trade panic. Trade wars—exacerbated last week by Trump’s latest gambit—could cost the global economy up to $1.2 trillion and pressure the Fed to cut rates more than expected. North American yield curves inverted further on this news, suggesting higher probability of...

Another Major Bank Cuts its 5-year Posted Rate

A fourth major bank has cut its posted 5-year fixed rate today. This time it’s BMO. The move comes four long months after the 100+ basis-point collapse in 5-year bond yields. Such a delay in reducing posted rates after large, market-wide rate drops is unusual historically speaking, as we’ve explained previously. See the chart below for more perspective. BMO’s cut today has implications...

Canada’s Stress-Test Rate Falls. First Time in Three Years.

The most important rate in the mortgage industry has dropped. Better late than never. The benchmark posted 5-year fixed rate has fallen from 5.34% to 5.19%. It’s the first change since May 9, 2018. And it’s the first decrease since Sept. 7, 2016, despite a 106-basis-point nosedive in Canada’s 5-year bond rate since November 8. Why it Matters The benchmark rate...

10-Year Fixed Rates Break Record. But Don’t Get One, Says Broker

Ever since decade-long mortgages slipped under 3% for the first time in May, those offering such rates have fielded more inquiries than ever before. And today, we saw another record breaker, with Sigma Mortgage offering the lowest 10-year fixed of all time: 2.89% (details below). But the more interesting aspect may be this: The company who just advertised that rate...

Trump vs. Xi. Let’s Get Ready to Rumble

Not much going on this weekend. Only a little meeting between the world’s two most powerful leaders about 2019’s single most important economic issue. U.S. prez Trump and Chinese supreme head communist guy, Xi, collide over trade ahead of Saturday’s G-20 summit in Japan. And, batten down the hatches, because it has the potential to be a short-term tide changer...

Canada’s Fixed-Variable Mortgage Spread Dives to Multi-Decade Low

If you’ve watched mortgage rates for a long time, you know how unnatural this is. The rate on a mortgage with five full years of locked-in interest expense costs less than the rate on a non-guaranteed floating mortgage with interest risk. In fact, that difference (spread) is the lowest it’s been in decades, based on deep discount rates offered to well-qualified...

5-year Fixed Rates Hit New Low + More Rate Nuggets

The latest intel from Canada’s mortgage market… Tanker Attack Torpedoes Rates There were sparks this week in the powder keg that is the Middle East. Sea terrorism triggered fears of war and/or oil supply disruption. That led investors to pile back into “safe” Canadian government bonds. As is usual when the market goes into “risk-off” mode, bond prices rose and yields sank (the two...

7 Reasons Why Canadian Mortgage Rates Vary So Sharply

Canada has a mortgage rate transparency problem. Too many lenders do not put their best cards on the table. To earn their best rate you have to dicker like you’re buying a rug at the bazaar. These rate games make borrowing cost comparisons needlessly more difficult and inefficient. And that’s exactly what some lenders are aiming for. Take this chart,...

5-Year Fixed Mortgage Rates Now Lowest Since 2017

This week, the lowest 5-year fixed rates dropped back to 2017 levels. It only took a year and a half. Canada’s cheapest 5-year fixed mortgage is now 2.67% for default-insured applicants, the lowest since December 20, 2017. And fixed rates could keep dipping near-term. What’s Behind It With global growth worries weighing on the market, 5-year bond yields can’t get any...