Mortgage Rate News

Prime Rate Jumps: What You Need to Know

In just the latest reminder that banks value profit above PR, each of the Big 5 have hiked prime rate by a full 1/4 point. That means the rate variable mortgages are based on rises to 2.95% on Thursday, at most big lenders. Some had speculated (hoped) that banks would lift prime just 15 bps to match their last stingy cut in 2015. But this was a “prime” opportunity for...

Not One and Done

The kingpin of Canadian interest rates has officially made it more expensive to borrow — for the first time since 2010. By boosting its overnight rate target 1/4%-point this morning, the Bank of Canada is jacking up interest costs roughly $245 a year for every $100,000 of variable-rate mortgage. And rest assured (or unassured), that rate hikes are like roaches....

The New Stress Test: Still Scratching Our Heads

Canada’s banking overlord, OSFI, is proposing a new 2-percentage-point (200-bps) “stress test” for people getting uninsured mortgages. Unlike the current stress test, which is based on one rate (the Bank of Canada posted 5-year, currently 4.64%), this new one is a frequently moving target. At 200 bps above the borrower’s contract rate, it would fluctuate significantly based on the lender and term selected....

This is One Beefy Rule Change

OK, how do I put this in a way that doesn’t sound over the top or like fear mongering? There was this mortgage rule proposal today, and it was a Whopper. No. Actually, it was larger than that. More like a BK Quad Stacker with extra bacon, cheese and Stacker sauce. It was big. The potential rules announced this morning were put out...

Rate Hike Mortgage Strategy

“It does look as though [rate] cuts have done their job.” That was Bank of Canada chief Stephen Poloz in a CNBC interview today. It was the second time he’s provided this “forward guidance,” and it’s about the closest thing you’ll hear to him saying “rates are headed up — soon.” Poloz’s statement was “the final straw” for BMO. It triggered a change in...

Meridian Credit Union’s 15-Month 1.50% Sale

People who live in Ontario are getting used to Meridian Credit Union’s quick-hit rate specials. Every few quarters the company seems to roll out a rate that undercuts just about everyone. This time, Ontario’s largest credit union is running a 1.50% special on a 15-month mortgage. At that rate, they’re almost giving money away. But should you bite? Here are a handful of points for...

GIC Rate Steal

We rarely comment on GIC deals but there’s an opportunity out there that can’t be ignored. GICs are not for most people, but for some conservative investors they have their place. For GIC lovers who crave extra yield (and who doesn’t), Oaken Financial’s current promo seems like a gift from the gods. Oaken Financial is owned by Home Capital, the mortgage company that was on the...

BoC Hikes: Mortgage Rate Surveillance

A quick briefing on recent mortgage rate developments: Higher Rates on the Radar: The market has now fully priced in a rate hike this year, based on the yields of interest rate derivatives. “Clearly this is no longer an economy that requires emergency-level interest rates,” says TD. Both it and CIBC predict the first 25 bps rate bump in October. But some analysts think...

Next Rate Move. Up?

Almost every public statement the Bank of Canada makes is scripted. Case in point was the speech today from the Bank of Canada’s Senior Deputy Governor in Winnipeg. She came with prepared remarks that were broadcast all over the Internet. Her (and the BoC’s) mission is clearly to get people thinking about rate hikes—more specifically, that rates will rise before they fall....

Debt Ratios Head Higher

Debt ratios are rising, but it’s not just because borrowers are taking on more debt. They’re rising because the government changed the rules of the game. Last October it made all insured mortgage borrowers prove they can afford a payment at the 5-year posted rate (currently 4.64%). Those artificially higher payments (coined the “stress test”) have increased people’s debt ratios, at least on paper. Numbers...