Mortgage Rate News

Mortgage Rates & Oligopoly Costs

Five-year Canadian yields are down 60 basis points in two months. Average 5-year fixed mortgage rates are down a measly 4 basis points.* Meanwhile south of the border, where they have this thing called mortgage competition, 5-year yields are down 54 bps and average 5-year fixed rates have fallen 16 bps so far. Average rates on the most popular U.S....

CHIP Max – Canada’s Maximum Reverse Mortgage

Apart from the interest rate, probably the biggest complaint among reverse mortgage borrowers is that they can’t get enough money. That’s now changing thanks to the launch of “CHIP Max” by HomeEquity Bank. In a nutshell, CHIP Max is a reverse mortgage that lets you borrow more money in return for a higher interest rate. That higher rate compensates HomeEquity...

Rangebound Rates are Variable-Friendly

Markets are “well ahead of the data.” …said the world’s most powerful banker Friday. With his comments, Fed chief Jerome Powell reminded everyone that bond markets usually price in economic slowdowns 6-24 months ahead of time. The market’s fear going into today was that the Fed would snuff out economic growth with “auto-pilot” rate hikes, that the Fed wasn’t listening...

Oops – Bonds – Did – It – Again

Recessionary warnings from Apple and China, weak U.S. manufacturing data and a plunging stock market accelerated the market rate collapse today. Canada’s 5-year bond yield almost touched 1.75%, where it hasn’t been since 2017. The last time yields fell this fast was March 2015, while the Bank of Canada was in the midst of cutting rates. This is not your...

Yields Break 2018 Low

Market rates are diving again. This morning the 5-year bond yield reached its lowest point since 2017. Investors keep rushing into safe assets (i.e., buying bonds) as the stock and oil markets continue selling off. Oil prices have slid from $75+ in October to under $45 today. That virtually eliminates any chances of a Bank of Canada hike this month....

2018 – One Tough Mortgage Year

Few years have altered the mortgage landscape like 2018. Canada experienced what is arguably the biggest mortgage rule change of all time (OSFI’s B-20 and its “stress test”). It was a policy that hammered mortgage growth to almost three-decade lows, slashing buying power over 20% for uninsured mortgagors and forcing roughly 1 in 7 borrowers to change or abandon their mortgage...

Variable Rates: Get ‘Em While Fat Discounts Last

There’s a concerning new trend with variable rates. Discounts are shrinking. In the last few weeks, at least a dozen relevant lenders have shrunk their discounts from prime rate—by anywhere from 5 to 20 bps. This includes discretionary mortgage rates at some banks. How Convenient Wouldn’t you know it? Just as variable rates start attracting more consumer interest, lenders start...

Home Un-Affordability: New Insights

RBC released its quarterly housing affordability report last week. Once again, it overstated mortgage un-affordability relative to prior decades (as previously noted). But it did have some points worth pondering. Among them: “Mortgage rates increased for a fifth straight quarter and accounted for the entire” drop in [RBC’s] affordability measure, the bank said. With rate-hike expectations dropping like a stone, our sense...

5-year Yield Approaching January 2018 Lows

Canada’s 5-year bond yield sank to an 11-month low Wednesday as the Federal Reserve hiked U.S. rates again. But the Fed wasn’t as optimistic on the economy as some had hoped. In turn, it’s now projecting just two rate hikes in 2019, versus the prior estimate of three. On this side of the border, average core inflation dipped to 1.9%...

New Capital Requirements: The Rate Impact

It’s sort of counterintuitive that making banks safer often costs you more as a borrower, but that’s what may happen in this case. Canada’s banking regulator (OSFI) has raised the minimum capital that banks must maintain…again. And there’s a good chance banks could take it out on mortgage borrowers, eventually. Here’s What Happened Back in June, OSFI created the “Domestic...