Mortgage Rate News

Liberals Win. The Mortgage Impact

For young homebuyers wondering what mortgage offerings politicians will gift them post-election, the answer is now clearer. The Liberal win in Monday’s federal election suggests first-time buyers will likely see a more flexible First-time Home Buyer Incentive (FTHBI). That was the Libs’ key election promise on the housing file. “We will…increase the qualifying value to nearly $800,000 in the places where...

Election Predictions: Housing Impacts

On Monday night we’ll find out which “housing affordability” plan Canada gets, be it from the Conservatives, Liberals or NDP. All three parties are promising to put homes more within reach, particularly for first-time buyers. Some of their proposals are merely vote bait; some are genuinely productive. After listening to the rhetoric for weeks on end, we’ve formulated three observations. Here are...

The Reverse Mortgage Train. Now Boarding

“There should be no shame” in relying on home equity to get you through retirement, said prominent financial commentator, Pattie Lovett-Reid, on BNN Friday. It marked a departure from her prior “bias,” she admitted. Up till now, she viewed reverse mortgages as a “last product of resource” (meaning a financing solution of last resort). Many financial “experts” see reverse mortgages...

Rates Lift Off on Trade Truce Hopes

Bond yields erupted Friday for the biggest two-day gain since 2011. Canada’s 5-year yield—which is closely watched for its influence on fixed mortgage rates—closed at its highest point since July. This comes after the Trumpinator heralded a potential U.S./China trade truce. The trade war, now a year and a half old, has pounded mortgage rates on the assumption that weaker...

SuperPrime Rates Could be Coming for Ultra-Qualified Borrowers

More than ever, your credit score affects your borrowing costs. The typical minimum for a decent deal is 650, but many lenders want 680 or 720 for their lowest mortgage rates, sometimes higher. As a general rule, big banks don’t discriminate as much on credit score as compared with other mortgage finance companies. Banks’ internal systems aren’t set up for...

Reminder to Politicians: Fuel Supply, Not Demand

As Canada’s federal election approaches, all the major parties are in vote-buying mode. The carrot they’re dangling in front of young homebuyers these days is buying power (more of it). That’s their “solution” to a problem they can’t quickly fix: high home prices. But the International Monetary Fund (IMF) is calling them out. The IMF, which is notorious for its...

Conversion Rates Reek…Often

There’s no industry-wide data on this, but whenever prime rate starts climbing, lenders tell us that at least 1 in 20 variable-rate borrowers lock in (convert) their variable rate to a fixed rate. And a good number of those borrowers are getting one stinky bum biscuit of a rate. One poor mortgagor I spoke with recently asked his lender to lock in....

How People Choose Between Fixed & Variable Rates

As much as academics advise against it, people (consciously or subconsciously) try to predict interest rates before choosing a mortgage. But, interestingly, they don’t look very far into the future when making these forecasts. “…Households are forward-looking over relatively short periods of time,” research shows. A 2015 international study by Cristian Badarinza, John Y. Campbell and Tarun Ramadorai found that “the...

Could the Stress Test Exacerbate the Credit Card Problem?

Mortgage debt has been in the crosshairs of federal regulators for years. But considerably less attention has been paid recently to unsecured debt—i.e. credit card—balances for which have been growing at an alarming pace. And with the 2016/2018 mortgage stress tests crimping the amount homeowners can borrow at low rates, it’s likely that even more Canadians will be forced to...

How Much Can You Borrow With a Reverse Mortgage?

Two-thirds of adults are saving for retirement, above and beyond forced-contribution government programs like CPP. That’s the good news. The bad news is that 35% of those approaching retirement (those over 55) have less than $100,000 saved up. $100k won’t get them far over their next 25+ years of life expectancy, even if they’re receiving: Old Age Security and the...