Bank of Canada Governor Stephen Poloz dropped some notable rate-related nuggets in a speech yesterday. Below we ponder the implications of those comments for mortgagors. Here’s what Poloz said: ****** “Inflation expectations have become firmly anchored on our 2 percent target…My children will never pay anything like the kind of interest rates I have paid in my lifetime.” Translation for...

So many factors can cause you to pay a higher mortgage rate. One of the least transparent is government regulation. Since 2008, Ottawa has layered mortgage policy upon mortgage policy, thereby boosting lender funding costs an estimated 25-50+ basis points depending on lender and mortgage type. These changes include the removal of insurability on various loan types (default-insured mortgages are...

In a speech last week, Canada’s banking regulator brushed off the “unintended consequences” of its controversial mortgage stress test with one sententious comment: “…The answer to this important problem…cannot be more consumer debt, fuelled by lower underwriting standards.” — OSFI Assistant Superintendent Carolyn Rogers She could not have been more right. More slack in “underwriting standards” was the last thing...

Never before has Canada’s banking regulator received so much pushback on a mortgage rule. OSFI has felt such heat from its controversial “B-20” stress test, that it’s started a campaign to defend its position—e.g., this speech last Tuesday (video) and this one last Thursday. From that and from what we know of regulators’ non-public comments, one thing appears clear. The government has...

The Department of Finance is considering a return to 30-year amortizations on insured mortgages, says the Canadian Homebuilders’ Association (as reported in the Globe and Mail). The last time we had 30-year amortizations on insured mortgages was 2012. This time, however, only first-time buyers might get access to them. Called “extended amortizations,” 30-year payback periods are still available to anyone getting an...

BMO Capital Markets has taken a “scalpel to [its] Canadian rate forecast,” as it describes it. The company now projects just one Bank of Canada rate increase in all of 2019. By comparison, financial traders peg the odds of a rate hike this year at just 49%. That’s according to implied probabilities in the bond market, as tracked by Reuters. BMO is...

Hopefully people don’t believe everything they read, especially when they read stories like this: “Instant mortgages are coming soon – what could go wrong?“ We’ve been meaning to comment on this piece of imaginative writing for a few months now, but real news got in the way. The article, originally published in October—from a respected journalist no less—is heavy on...

If we were betting types, we’d wager that in coming months the government makes it possible to mortgage a 7-figure property with just a modest down payment. Here’s why. At the moment, there is a $1 million property value limit if you want to buy a house with less than 20% down and get the best mortgage rates. That price...

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...

Reuters reported Friday that regulators were considering drastic new restrictions on private lending. But given the newswire’s anonymous sources, no one has been able to validate the reporter’s claims. We’re now hearing that Mortgage Professionals Canada President, Paul Taylor, spoke with the Ministry of Finance about the article on Friday. According to an internal memo at MPC, a senior policy advisor at...