Categories for Mortgage Rate Trends

The Stress Test Rate Drops Further

The Mortgage Report – May 16 Now to 4.94%: Scotiabank trimmed its posted 5-year fixed rate to 4.94% on Saturday. That puts the mode average of the Big 6 Banks’ 5-year posted rates—and hence the minimum stress test rate—at 4.94%. Of note: This is the lowest the stress test rate has been since October 2017 The all-time low was 4.64%,...

Historically Bad Housing Numbers

Mortgage Report – Weekend Edition Prices Tumble in April: The national average home price in Canada has plunged almost 10% in one month (April). That’s never happened before in CREA data going back to 1980. The next closest month-over-month drop was -7.6% in April 1989. The data was skewed partly by the GTA’s 11.8% nose-dive. Home Inventories Skyrocket: The total...

Stress Test Rate to Drop Next Week

Mortgage Report – May 14 De-Stressing: Call out the marching band, BMO’s posted 5-year rate cut today should ease the government’s mortgage “stress test,” effective next week. As it stands, the minimum stress test rate will likely fall from today’s 5.04% to 4.99%. It’ll mark the first time since January 2018 (when OSFI’s stress test began) that this benchmark rate...

The Stress Test Rate Could Fall Again

Mortgage Report – May 12 Not So Timely: The government’s 5-year bond yield, which heavily influences fixed mortgage rates, peaked in October 2018. Since then, it has collapsed 212 basis points. Meanwhile, big banks have lowered 5-year posted rates just a stingy 30 basis points. The banking regulator (OSFI) considers that a problem and proposed to de-link the mortgage stress...

Today’s Value Zone: 3-year Rates

Mortgage Report – May 11 Hitting Triples: Borrowers would love to see 5-year fixed rates under 2% and eventually they’ll get there. But for now, banks are “reducing mortgage rate discounts to conserve profitability,” as Deloitte put it in a recent report. Alas, we’ll have to make do with the historically low rates we already have. And for all you...

Fixed Rate “Insurance” Gets Cheaper

The Daily Mortgage Report – May 4 Variable Advantage Fades: The lowest widely available 5-year fixed rates are now just 20 basis points more than the lowest variable rates. That differential has shrunk considerably in the last month or so, causing some would-be variable takers to give up and go fixed. RateSpy simulations confirm it would now only take two...

Daily Mortgage Report – May 1

Tiff Gets the Nod: Canada’s most important banker will soon be Tiff Macklem. Effective June 3, he’s taking over for Bank of Canada Governor Stephen Poloz. We’ll hear Macklem at BoC rate announcements for the next seven years and already he’s moving markets. Following his appointment Friday, he spoke of: downside risks to the economic recovery the fact that negative...

Daily Mortgage Report – April 30

9:09 p.m. Update Southbound Fixed Rates: Lender after lender has announced fixed-rate drops this week. And with Canada’s 5-year yield closing at a record low today, it’s no coincidence. It was the first time ever that our 5-year bond closed below 0.40%. Prerequisite for Recovery: “…We need monetary stimulus to reach the ultimate borrower,” said BoC chief Stephan Poloz today....

Daily Mortgage Report – April 29

TD Canada Trust rate cuts: Special fixed rates drop from: 3yr: 2.99% to 2.89% 5yr (high ratio): 2.99% to 2.79% Posted rates drop from: 1yr fixed: 3.59% to 3.44% 2yr fixed: 3.74% to 3.54% 5yr variable: 2.65% to 2.35% (P – 0.25%) Every time a bank cuts 1- and 2-year posted rates, it raises the chances of customers paying bigger...

Daily Mortgage Report – April 28

Tough Sledding: The mortgage industry will remain under pressure “over the near-term as employment trends weaken, credit loss provisioning moves higher, and housing / mortgage activity pulls back materially,” TD says. If government subsidies disappear in 2021, the bank projects 50% higher mortgage defaults industry-wide, peaking in first quarter 2021. But the overall arrears level will stay below the historical...