Mortgage Rate News

BoC Stands Pat. Prepare for B-20

Not much to see at today’s Bank of Canada meeting. It was another yawner as prime rate held at 3.20%. Among the few takeaways: The Bank stated: “While higher interest rates will likely be required over time, Governing Council will continue to be cautious…” Interpreted this means: Higher rates are on their way, between now and when we die. If...

Low Rate or Low Borrowing Cost?

Would you rather have the lowest mortgage rate or the lowest borrowing cost? If you picked the latter, good for you. You’re mortgage savvy, and you’re in the minority. Check out this chart from a recent Manulife survey. Its findings show that the “interest rate” dominates all other factors when consumers pick a mortgage. That’s great news for a rate comparison...

Don’t Buy Mortgage Insurance for Nothing

We don’t buy the numbers in this story. Its premise is that some people are better off paying for mortgage default insurance—even if they don’t technically need it—just to get a better rate. The reason: insured rates are lower than uninsured rates (45 bps lower, claims the broker in the story). Really? Let’s test this theory and see if mortgage...

Over Half of Us to Get Online Mortgages: Meridian CU

It’s not a question of whether mortgages will someday be arranged completely online. The question is, how long will it take? When we do finally get there, you’ll still be able to speak with a human advisor for mortgage help, but not in person. Not if you want the lowest rate. “We envision potentially having a better rate for online...

OSFI Rules to Cost Mortgage Renewers

Renewing a mortgage could soon get a lot more costly for 700,000+ Canadian families. And they’ll have OSFI to thank. The banking regulator’s new stress test will drive up debt ratio calculations for most conventional borrowers by 6 to 7 percentage points. That’s enough to push a minority of renewers right out of the qualification zone. Why this matters: Lenders use...

A Case Where Banks Lose & Credit Unions Win

Canada’s new “B-20” mortgage stress test will be a tectonic shift for the roughly 1 in 6 borrowers it affects, starting January 1. It’s going to force higher-indebted creditworthy borrowers to either: reduce their loan amount, seek help qualifying (e.g., find a bigger down payment or co-signor), defer their homebuying plans, or seek out a non-bank lender, like a credit...

No Rate Change Today

If you have a mortgage that floats with prime rate, the constant chatter about rate hikes may be unnerving. Well, now you can take a breather—because the Bank of Canada has taken a breather. The Bank left rates alone today and hinted that future rate hikes may be further off than economic forecasts suggested. If you had to sum up its announcement today in...

The New Stress Test Could Affect Your Pre-Approval

If you’re among the roughly 1 in 6 conventional borrowers with the highest debt ratios, OSFI’s new mortgage stress test could keep you from: buying the home you want (which may be a good thing) renewing at better rates with another lender, or refinancing to lower your debt burden. That’s making hundreds of thousands of borrowers somewhat anxious. It’s why we’re seeing a small...

Stress Testing May Start Sooner

On Tuesday the government announced a January 1, 2018, implementation date for its new uninsured mortgage stress test. In that announcement it said something else that many glossed over: “Where possible, federally regulated financial institutions are expected to comply with the principles and expectations set out in this guideline as of the date of this letter [October 17, 2017].” OSFI told us today, “Banks are expected...

Key Mortgage Rule Clarifications from OSFI

Below are important clarifications on Canada’s new B-20 mortgage rules. Most of this stuff was not explicitly discussed in OSFI’s announcement yesterday. But if you’re getting a mortgage or HELOC, it’s need-to-know info. Amortization Limits:  One way to partially mitigate the new stress test is by extending your amortization. “OSFI has not included specific references to a ‘qualification’ amortization rate in its final Guideline B-20....