Categories for Mortgage Rate Trends

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. The culprit: a worsening outlook for North America’s...

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...

Foreigners Sway Canadian Mortgage Rates

Do you care if some investor in China or France dumps Canadian bonds? Many would answer, no. But when foreign demand for Canadian bonds drops, other things equal, bond prices drop. And given bonds and yields (interest rates) move inversely, and given fixed mortgages are partially funded in the bond market, when overseas demand for Canadian bonds falls, it usually...

Fixed and Variable Rates are Closest Since 2016

The gap between the best 5-year fixed rates and best variable rates is the smallest its been in two and a half years. We’re talking less than 1/8th of a percentage point between them. Depending on the equity a borrower has, folks can even find 5-year fixed rates that are below the best variable rates. What’s Provoking It One reason...

Rate Nuggets: The Nosedive in Refinancing

Mortgage regulation and higher rates changed the game in 2018, lowering the amounts borrowers could qualify for by up to 20% and reducing the incentive to renegotiate for a better rate. That had clear implications for refi volumes. Using Teranet‘s 2018 Ontario data as a guide, the number of borrowers: refinancing with their existing lender plunged 36% (vs 2017) switching their...

TD’s Market-Moving Rate Cut

It turns out TD Canada Trust’s “market-moving rate cut” won’t be so market moving, at least not yet. On Sunday, TD slashed a number of fixed rates on its website. Today it un-slashed them, saying: “Changes to our posted rates on our website were made in error. We apologize for any misunderstanding and please refer to the rates currently posted.”—TD...

Reverse Mortgage Challenger Slashes Rates

Equitable Bank has slashed its reverse mortgage rates. That’s welcome news for seniors needing to tap home equity, particularly those who can’t qualify for regular financing or don’t want the payments. The company—which has remained in HomeEquity Bank’s shadow—is now working noticeably harder to separate itself from its better-known rival. And its rate cuts this week do just that, assuming...

Mortgage Rates Heading South Again

There’s an increasingly ominous vibe to Canada’s economic outlook, and that’s got the market taking rates down another notch. Canada’s 5-year bond yield is seven basis points lower today—to 1.63% as we write this. That’s the lowest it’s been since December 2017. All told, the 5-year yield has now sank 83 basis points since the November high. With the Bank of Canada...