Categories for Mortgage Rate Trends

Rate Surveillance: Fixed Rates Improve

Don’t pop the Dom Pérignon just yet, but rates on Canada’s most popular term—the 5-year fixed—have dropped in the last two weeks. And it’s high time they did. Government bond yields have trended below their three-month average since December. (Bond yields and mortgage rates have a cozy relationship since lenders commonly price fixed mortgages against bond rates.) As usual, the Spy’s crack intelligence team brings you the...

Rate Surveillance: Yields Drop, Forecasts Drop, Rates Barely

It got sort of ugly out there this week. Oil prices sank to dozen-year lows, swap rates (which guide fixed mortgage rates) fell to record depths and stocks tanked, before eventually recovering. Often times, market action like this leads to cheaper mortgages. But these days lenders aren’t about to drop their pants on rates. They have other problems. Investors are getting scared. Check out this measure of credit risk in the interest...

A History-Making Day for Rates

It finally happened. After a year of bouncing off the 0.50% range, the 5-year government bond yield finally closed below it. The last time that happened was…never. Canada’s 5-year government yield (which guides fixed mortgage rates) closed even lower than the Bank of Canada’s overnight target. In other words, the rate to lend for five long years is less than...

Sub-zero Yields & Cheaper Fixed Mortgages

It’s fashionable to be negative these days.  To have a negative yield, that is.  Since 2012, it’s been increasingly common for government bonds to have interest rates (yields) below zero. Not only are investors in those bonds earning no return, they’re actually paying to save—i.e., paying for governments to hold their money safely. Mortgage Implications Global yields matter in a mortgage context because fixed rates are closely...

Don’t Fear the Rate Blip

It’s been six whole days since RBC unexpectedly hiked mortgage rates, encouraging a herd of banks to follow its lead. But my oh my, how things can change in just one week. Interest rates outside the mortgage market have plummeted and rates are about to change…again. That’s got many thinking RBC’s rate hikes were just a blip (at least for fixed rates). If you’re a mortgage shopper,...

RBC Did What?

Mega-lender RBC announced today that it is raising 2- to 5-year fixed rates by 10 basis points and variable rates by 15 bps. (A basis point is 1/100th of a percentage point.) Is this a practical joke? RBC is lifting mortgage rates despite 5-year bond yields nearing four-month lows? That’s what many may be asking, but this is no joke....

The Fed Moves

Here are five things to know about Wednesday’s 1/4% U.S. rate hike: It’s over and done with, and it’s about time. Talking heads have yacked about the start of Fed tightening for years now. Meanwhile, the big event finally happened yesterday and bond yields (which guide fixed mortgage rates) barely moved. Yes, the Fed’s actions could push up Canadian long-term rates somewhat, out of sympathy alone. But ultimately...

Mortgage Briefs – Down Payments & Rates

As we turn the page on 2015, get ready for a host of new mortgage trends in the next 12 months. We’ll see new down payment rules, more talk of negative interest rates, and surprising moves with bond yields. Analysts are already making their predictions on how mortgage shoppers will be affected. Here’s a glimpse of what they’re saying now: On Higher Down Payments Last week the...

Rate Surveillance

The Spy’s latest mortgage rate intel… Fixed Rates 5-year fixed rates are up 15-20 basis points in the last 60 days (ouch). A basis point, or bps, is 1/100th of a percentage point. Fixed rates track swap rates (and bond yields, but swap rates are a better proxy if you have the data). 5-year swap rates shot up with U.S. Treasury yields a...

Interest Rate Forecasts Take a Dive

Interest rate projections are always a moving target so you never want to rely on them. But it’s nonetheless notable when forecasts from all major banks plunge at once. That’s what happened recently, after the Bank of Canada (BoC) unexpectedly chopped rates by 1/4% on July 15. Prior to that rate announcement, Canada’s Big 5 banks all saw Canada’s key rate climbing to 0.75% by the end...