Mortgage Rate News

Mortgage Costs to Rise in 2018, Scotia Says

Scotiabank’s out with a new prediction. The nation’s #3 mortgage lender says rising rates will cause average mortgage carrying costs for new buyers to jump 8% in 2018 and another 4% in 2019 (assuming stable home prices). “Further rule changes, including more stringent stress tests for uninsured mortgages…would exert additional drag on new buyers,” the bank noted. Existing mortgage holders, whom the...

Forget Fake News. How Bout Fake Rates?

If Donald Trump were a regular guy with a mortgage, he’d surely be appalled by all the fake rates in the media. You just can’t take rates at face value anymore. Consider this column from our favourite personal finance author. The broker interviewed in the story (we won’t name names) quotes three variable rates: For conventional mortgages on homes of $1 million or more: ...

Mortgage Closing Costs. Be Ready.

You’ve just made the biggest purchase of your life. After waiting months to close on your home, suddenly you’ve found yourself short $4,000. All too often, unnoticed costs catch new homebuyers by surprise. That’s despite lenders commonly requiring “proof” that you can cover your closing costs. A TD home buyers survey found that 13% of first-time buyers “overlooked some of the one-time...

BoC Hikes Again. So Long Sub-2% Mortgage Rates

For now, the days of sub-2% everyday mortgage rates are officially over. Wednesday morning’s slightly surprising 1/4-point Bank of Canada hike was the nail in that coffin. The ensuing 1/4-point bump in prime rate will push all remaining mortgage rates above the psychologically key 2% threshold. By next week, the lowest rates should jump roughly as follows: Insured variable rates:  From 1.89% to 2.14%+ Uninsured variable...

What Rate Forecasters are Telling Us

It’s been seven weeks since the Bank of Canada began its first rate hike cycle in seven years. But with its next meeting on Wednesday, will it pull the trigger again? Derivatives prices imply there’s a 50% chance it does, and a 100% chance that it hikes by October. Prime rate would jump 1/4%-pt if the BoC does move. “We narrowly favour October over September, as...

Canadians Not Doing Enough Mortgage Homework at Renewal

Three in five Canadians say they do “a lot” of research before choosing their mortgage, according to a recent Ipsos poll. But when it comes to mortgage renewals, too many put in too little effort. Only 42% of renewal customers claim to do a lot of mortgage research. A disappointing 1 in 5 (22%) admit to doing no research at all. That’s a real problem...

Private Rates Still Elevated Amid Tight Funding

Private (non-prime) lenders are getting tapped out across the country. Fisgard Asset Management Corporation, one of Canada’s largest mortgage investment corporations (MICs), is no exception. “It’s a dynamic time right now,” says Hali Noble, SVP at Fisgard. She explains that Home Capitals’ near-failure, Equitable Bank’s funding problems and government rule tightening have spiked demand for private mortgages. The company, which manages $240 million in loans, has almost fully utilized...

Some MFCs Are Risking Their Reputation

Mortgage Finance Companies (MFCs) pitch themselves as a better alternative to the banks. But that’s definitely not true in all cases. Here’s one example. At the moment, certain MFCs are refusing to offer blends and increases and/or refinances to existing customers. They’re doing this despite marketing those very same “features” to the brokers who sell their mortgages, who in turn...

What is the Mortgage Qualifying Rate? (Stress Test Rate)

Lenders want to make sure you can afford higher mortgage payments if interest rates soar. So does the government. That’s why regulators created the mortgage qualifying rate (MQR) — a.k.a.,  “benchmark qualifying rate,” “benchmark interest rate” or “Bank of Canada qualifying rate.” The MQR is the interest rate most commonly used to “stress test” mortgage borrowers. Stress testing is the process of calculating...

Rates Could Rocket, But…

When it comes to rate predictions, the bond market outwits us all. It incorporates every known economic variable to arrive at today’s level of interest rates and estimate future rates. Right now, the bond market is flashing two vivid signals: Rates are on the upswing Bond yields, which guide fixed mortgage rates, are nearing a 3-year high and they seem poised to...