Mortgage Rate News

Would You Use a Robo-Mortgage Advisor?

Someday you’ll be getting mortgage advice from an online robot. This “chatbot” will ask you questions to determine your needs. It’ll then recommend the most suitable mortgage based on your answers and its programming. Today, of course, people use human mortgage advisors for this very same thing. But robo-advisors are different. They don’t: Sleep (They’re available anytime you are, 24/7/365)...

How a Trade War Could Hold Rates Down

“We cannot withstand a trade war with the United States” – Rona Ambrose. When over 70% of your exports go to one country, and that country’s representatives say, “There’s a special place in hell,” for your Prime Minister, that’s a problem. This is what the state of relations has come to between two of the world’s closest allies. Given Trump’s tendency to...

How Do Mortgage Brokers Get Paid?

When a prospective homebuyer finds out they don’t need to pay for the services of a mortgage broker, their first thought is often: “What’s the catch?” Like many financial advisers, mortgage brokers typically get paid by commission. The lender providing the mortgage pays the broker that commission (finder’s fee) for referring and managing the application and mortgage closing. How Much...

U.S. & Canada Go to (Trade) War: The Mortgage Angle

Captain Chaos, a.k.a., The Golden Wrecking Ball, a.k.a., President Donald, has just punched America’s allies in the face with a short-sighted metals tariff, a move Canada and the EU proclaimed “totally unacceptable.” Canada, being the largest exporter of steel to the U.S., immediately counter-punched today with tariffs on U.S. exports. All of this doesn’t look good if you’re hoping to...

It’s Status Quo for Prime Rate

Here’s the latest on today’s Bank of Canada rate announcement: Rate Decision: No change in rates Prime Rate: Remains at 3.45% Market Rate Outlook: Two more hikes in 2018 BoC GDP Outlook: 2% growth in 2018 and 2019; 1.8% in 2020 BoC Statement: Click here The Money Quote: “…Developments since April further reinforce Governing Council’s view that higher interest rates will be warranted to keep...

Bond Yields Dive: Could Fixed Rates Follow?

All it takes to derail an uptrend in mortgage rates is one little global crisis. And that’s potentially what we’ve got. Canada’s 5-year bond yield—which drives fixed mortgage rates—has plunged. As of this writing, it’s down almost 30 basis points from its high two Fridays ago. This latest nosedive is courtesy of shoot-first-ask-questions-later AAA bond-buying. (Rates move inversely to bond...

Don’t Go Variable Because Rates Are “Overextended”

The worst trap a mortgage expert can fall into is thinking they’re shrewd enough to predict interest rates. Yet, they do it because they: Think they’re smarter than the market Want media, readers or clients to think they’re smarter than the market Are completely delusional. The most comedic rate commentators are the ones who couch their predictions in vagaries so...

Are Banks Milking Variable-rate Holders?

Prime – 1.00% is a primo mortgage rate. No question about it. Yet, there are people complaining that it’s not the “prime minus one” of old. Prior to January 2015, critics point out, prime rate was 200 basis points (bps) above the Bank of Canada’s key lending rate. Now, banks have pushed this margin to 220 bps. The fatter this...

RBC & CIBC Join the Variable Revelry

The big fella, RBC, has come to play with its very own prime – 1.00% offer. So has CIBC, according to our branch contacts. (CIBC’s official comment is that, “Our posted rates…have not changed,” but that says nothing about its discretionary rates, which are lower. Spokesperson Jason Wesley suggests people “speak to a financial advisor” to get a quote.) It’s been years...

More Banks Enter the Variable-rate Fray

“Rate war” is a cliché in this business. But that’s exactly what we’ve now got in the variable-rate mortgage market. BMO started it all with its record-setting prime – 1.00% offer. TD then promptly matched. Now we’re hearing from Scotiabank branch sources that it’s offering prime – 1.00% as well — but only for new client applications and not for refinances...