Mortgage Rate News

TD’s Variable Rate Goes on Sale

The variable-rate market just got a shade more interesting. TD has announced that, effective tomorrow, its 5-year variable rate drops from 2.90% to 2.75%. That’s equivalent to TD mortgage prime minus 1.10%. (In case anyone forgot, TD’s mortgage prime is 15 basis points higher than other banks’ prime rates.) “Canada’s housing market continues to fluctuate, and rates continue to rise,”...

Prime Rate is Going North (Again)

If low rates are a yard party, the Bank of Canada has just turned up the lawn sprinklers. Here’s a rundown of what they just did: Rate Decision: They increased the overnight rate 25 bps Prime Rate: Should jump to 3.70% this week Market Rate Outlook: 2+ more hikes by year-end 2019 BoC GDP Outlook: “Average growth of close to 2% over 2018-2020″...

Variable Rates Maintain Appeal, Despite Higher Rates

Despite higher rates, a healthy slice of our population is staying open minded to variable mortgage rates. A CIBC poll today finds that: 72% of Canadians expect rising interest rates over the next 12 months (26% think they’ll stay the same) An overwhelming 83% of Canadians favour “predictability and stability over risk” when it comes to their finances (unsurprisingly) 77%...

The Bank of Canada May Do You a Favour

The market is betting on rates heading higher this Wednesday. That’s bad news for mortgage shoppers. Or is it? One could argue that a rate hike on July 11 makes the fixed or variable rate decision even easier. Essentially the Bank of Canada is doing mortgage shoppers a favour. Here’s why… Closer to the Finish The higher rates go, the...

Competition, Stress Test, Driving Down Rates

Love it or hate it, Canada’s controversial mortgage stress test has led to one welcome benefit: bigger mortgage discounts. That’s due partly to slowing demand for B-20-compliant mortgages—i.e., mortgages that require borrowers to pass the banking regulator’s “stress test,” which was adopted in January. In its latest Senior Loan Officer survey, the Bank of Canada writes, “Mortgage approval rates continued...

Could a Recession Derail Mortgage Rates?

AbsoTrumpingLutely. The more useful question is, what are the chances it will? Economists project Canada’s economy could shrink 1.8% in 2020 if the U.S. pushes us into a global trade war. In that case, we’d fall into recession in late 2019 or early 2020, they say. Canadian exports would dive, partly due to U.S. tariffs making our goods too expensive...

Mortgage Renewals Now More Costly — For Those Least Able to Pay

One in four borrowers will renew their mortgage this year, estimates the Bank of Canada. Some of them are about to find renewing a whole lot trickier and potentially more expensive — thanks to two important rule changes: #1.  The Much-Publicized Stress Test As most of you now know, on January 1 the government (OSFI) made it harder to get...

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...