Categories for Mortgage Rate Trends

A Closer Look at TD’s Online Mortgage Play

Canada’s banking giants have invested massively in branches and mortgage salesforces. But now mortgages are moving online, and that creates both opportunity and conflict for the Big 6. “Canadians are predominantly using online tools as they start the homebuying journey,” says Pat Giles, VP Real Estate Secured Lending at TD. His bank, like every other, is working hard to be...

The Stealth Hike in Variable Rates

The most unexpected trend in the mortgage rate world of late has been the squeezing of variable-rate discounts. The Spy warned of diminishing variable-rate discounts last month. Since that time, they’ve shrunk 20 basis points on the most competitive uninsured variables, costing new borrowers over $2,300 more interest over five years on a typical $250,000 mortgage. On the insured side, the...

A Major Bank Finally Drops 5-year Fixed Rates

At long last a Big 6 bank has cut its advertised 5-year fixed rate. RBC set the trend today in lowering its “special offer” 5-year fixed rate by 15 basis points, from 3.89% to 3.74%. (See: RBC mortgage rates) It only took a month and a half after five-year bond yields fell enough to warrant a rate cut. (Bond yields typically guide fixed-rate...

The Fixed-Variable Spread Shrinks Further

A regular consideration when choosing between a fixed or variable rate is the difference between them. As of late that “fixed-variable spread,” as we jargony industry people call it, has been slowly narrowing. So far, it has mostly been a result of diminishing variable-rate discounts. Just this morning, for example, TD hiked its advertised variable rate a head-turning 20 bps....

Mortgage Rates & Oligopoly Costs

Five-year Canadian yields are down 60 basis points in two months. Average 5-year fixed mortgage rates are down a measly 4 basis points.* Meanwhile south of the border, where they have this thing called mortgage competition, 5-year yields are down 54 bps and average 5-year fixed rates have fallen 16 bps so far. Average rates on the most popular U.S....

Rangebound Rates are Variable-Friendly

Markets are “well ahead of the data.” …said the world’s most powerful banker Friday. With his comments, Fed chief Jerome Powell reminded everyone that bond markets usually price in economic slowdowns 6-24 months ahead of time. The market’s fear going into today was that the Fed would snuff out economic growth with “auto-pilot” rate hikes, that the Fed wasn’t listening...

Yields Break 2018 Low

Market rates are diving again. This morning the 5-year bond yield reached its lowest point since 2017. Investors keep rushing into safe assets (i.e., buying bonds) as the stock and oil markets continue selling off. Oil prices have slid from $75+ in October to under $45 today. That virtually eliminates any chances of a Bank of Canada hike this month....

2018 – One Tough Mortgage Year

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 almost three-decade lows, slashing buying power over 20% for uninsured mortgagors and forcing roughly 1 in 7 borrowers to change or abandon their mortgage...

Variable Rates: Get ‘Em While Fat Discounts Last

There’s a concerning new trend with variable rates. Discounts are shrinking. In the last few weeks, at least a dozen relevant lenders have shrunk their discounts from prime rate—by anywhere from 5 to 20 bps. This includes discretionary mortgage rates at some banks. How Convenient Wouldn’t you know it? Just as variable rates start attracting more consumer interest, lenders start...

5-year Yield Approaching January 2018 Lows

Canada’s 5-year bond yield sank to an 11-month low Wednesday as the Federal Reserve hiked U.S. rates again. But the Fed wasn’t as optimistic on the economy as some had hoped. In turn, it’s now projecting just two rate hikes in 2019, versus the prior estimate of three. On this side of the border, average core inflation dipped to 1.9%...