Imagine if 250,000 to 350,000+ homeowners couldn’t get cost-competitive private mortgages anymore. That’s the potential result if the feds impose a mortgage stress test on private borrowers. And they’re considering just that, according to a Reuters report today. At this point there are more questions than answers, like does this apply just to mortgage investment corporations (MICs) or to all...

The most unexpected trend in the mortgage rate world of late has been the squeezing of variable-rate discounts. The Spy warned of diminishing variable-rate discounts last month. Since that time, they’ve shrunk 20 basis points on the most competitive uninsured variables, costing new borrowers over $2,300 more interest over five years on a typical $250,000 mortgage. On the insured side, the...

Comparing mortgage rates is more worthwhile today than it was two years ago, for multiple reasons. For one thing, Canada’s average mortgage balance is now up to $263,657, according to TransUnion. This number has been rising for years, and it’s risen another 4.23% in the 12 months ending Sept. 30, 2018 (the latest data available). The bigger your mortgage, the mortgage...

The talk of the market this month is how traders are pricing in a decelerating economy and lower interest rates — to which Scotiabank Economics replies, think again. December’s selloffs in oil and equities and incessant chatter about yield curve inversion got many thinking we’re headed towards a rate cut by 2020. But in a recent report, Scotia challenged that...

After the Financial Consumer Agency of Canada (FCAC) released its critical report on HELOCs Tuesday, industry folks started wondering what the regulator is going to do with this information. We asked the agency and it told us, “FCAC’s mandate includes the responsibility to monitor and evaluate trends and emerging issues that may have an impact on consumers of financial products and...

At long last a Big 6 bank has cut its advertised 5-year fixed rate. RBC set the trend today in lowering its “special offer” 5-year fixed rate by 15 basis points, from 3.89% to 3.74%. (See: RBC mortgage rates) It only took a month and a half after five-year bond yields fell enough to warrant a rate cut. (Bond yields typically guide fixed-rate...

Most consumers are underinformed about HELOCs. 27% of HELOC holders are only making interest-only payments most/all of the time. Too many HELOC holders may be using them to overspend. Those were key findings from today’s Financial Consumer Agency of Canada (FCAC) report on HELOCs. HELOCs have been the single-biggest contributor to rising non-mortgage household debt over the past 15 years—”more than...

A regular consideration when choosing between a fixed or variable rate is the difference between them. As of late that “fixed-variable spread,” as we jargony industry people call it, has been slowly narrowing. So far, it has mostly been a result of diminishing variable-rate discounts. Just this morning, for example, TD hiked its advertised variable rate a head-turning 20 bps....

The Bank of Canada maintains that rates are going higher. Meanwhile, it just slashed Canada’s 2019 growth forecast by a not-so-paltry 0.40 percentage points. Does that strike anyone as a mite bit inconsistent? The Bank is now calling for just a 1.7% GDP gain this year. That’s pretty darned feeble. Bonsai trees and glaciers grow faster than 1.7% a year....

The market knew we wouldn’t get a rate hike today. Instead, it was scouring the Bank of Canada’s messaging for guidance on where rates are headed. And the market found it. The bank’s statement this morning reinforced that it expects higher rates, but it will take longer than they thought. Here’s more on the BoC’s latest decision, and what it...