Mortgage Rate News

Fed Cuts. Canadian Rates Barely Move

Canadian mortgage rates follow U.S. rates like spring follows winter. So today’s U.S. Federal Reserve rate cut is most relevant indeed. The Fed chopped the floor for its key target rate by 25 bps today to 1.75%—the same as the Bank of Canada. It’s the second cut in 49 days, but only the second cut since 2008. As usual, the...

Rates Hit 2-Month High + Other Rate Nuggets

Bond Bloodbath It was a grisly Friday the 13th in the bond market. Investors ran from bonds like they were being chased by Jason Voorhees with a chainsaw. U.S. 5-year bonds crashed (yields soared 12 bps), which drove Canada’s 5-year to a two-month high. For non-bondy types, bond selling drives up rates since the two move inversely. Catalysts for the carnage...

The FTHBI Becomes More Useful (to First-Time Buyers)

It didn’t take the government long to propose changes to the First-Time Home Buyer Incentive (FTHBI). Just 10 days after the program launched, and following criticism that the Liberals’ new program didn’t address housing needs in high-priced markets, the Libs have tweaked it. Effective this November, if you live in one of three high-cost regions, qualifying for the program may...

RateWatch: Bond Yields Going Vertical

Some people think we’re in a bond market bubble. If that’s true, and we’re not declaring it is, the last four days are kinda what you get when a bubble pops. Bond investors are in a momentary state of panic. Canada’s bellwether 5-year government yield has catapulted 31 basis points in just four trading days. The last time that happened...

The Power of Short Terms

Knowing the future wouldn’t help you pick the right mortgage. Unless you knew all the future. Imagine a fantasyland case where it was 100% certain that all mortgage rates would be higher in five years. With that priceless information most people would take a 2.49% five-year fixed over a 2.59% one-year fixed. But initial rates and ending rates are only two...

The Bank of Canada Won’t Gamble on a Rate Cut…Yet

Markets predicted the Bank of Canada would do nothing to rates for the 11th straight month…and they were right. Here’s a quick look at the BoC’s rate statement: Rate Decision: No change Overnight rate: Remains at 1.75% Prime Rate: Remains at 3.95% Market Rate Forecast: No change to prime through 2020 BoC’s Headline Quote: “…Canada’s economy is operating close to potential and inflation...

First-Time Home Buyer Subsidy Starts Today

After five months of buildup, the government’s controversial First-Time Home Buyer Incentive is now live. Kind of. Applications for the program, which lowers borrowers’ interest and default insurance costs (using taxpayer dollars that may or may not be recouped), are supposed to be available here. But the forms aren’t on the government’s website yet, despite the September 2 launch date....

Competitors Attack Banks on Mortgage Penalties

If there’s one thing the major banks wish would go away, it’s talk about their fixed-rate mortgage penalties. Competitors constantly use accounts of huge bank penalties to sell against the banks, and the media picks up on it. Expect more of this as mortgage penalties approach record highs. In the last few months, we’ve seen non-bank lenders increasingly market their...

Fixed Mortgage Rates Falling Faster Than Bond Yields

Any creditworthy mortgage shopper is practically guaranteed to get a better rate today than they could have at the start of the year. Fixed mortgage rates have been on a ski slope this year, sliding to two-year lows this month. If you’re wondering how far they’ve tumbled, here’s a look. These were the best widely available 5-year fixed rates, as...

Trade Tantrums. Keeping a Lid on Mortgage Rates

Just when you think it’s safe to go back in the water, just when you think rates might be putting in some kind of floor, the bottom falls out again. Canada’s 5-year government yield did a 180 on Friday. After shooting higher earlier, it plunged 11 bps to end the week. It falls that much only about 1 in 100...