Mortgage Rate News

Don’t Time Mortgage Rates. How to Time Mortgage Rates

Lest you think too many mimosas at Sunday brunch impacted our headline choices today, fear not. As long-time readers can attest, we don’t hype interest rate timing around here. Guessing rate direction beyond the short term can be like guessing solar flare intensity. It ain’t easy. Professional economists with big fat salaries botch rate predictions for a living. Yet, many...

“Real” Mortgage Carrying Costs Have Never Been Higher

—The Mortgage Report: Sept. 30— The costs you’re expected bear to carry a new mortgage have never been higher—at least based on how lenders assess you as a mortgage applicant. Rocketing home prices and a stubbornly high “stress test rate” have pushed the basic inflation-adjusted cost to carry a home (i.e., average mortgage payment + heat + property taxes) to...

Prepayment Envy

—The Mortgage Report: Sept. 28— Ever wonder who’s got the most generous prepayment privileges in Canada on a closed mortgage? So did we, so we just looked in our database of 3,000+ rates to find out. It turns out that credit unions rule the roost when it comes to annual lump-sum prepayment allowances. The leaders: 30% per year: Casera Credit...

One-Year Mortgages Edge Closer to 1%

Not One and Done If you’re going to gamble on a short-term rate, you could do a lot worse than 1.29%. On a contract rate basis, that’s the lowest fixed mortgage rate Canada has ever seen. And it’s probably not done dropping yet. This latest one-year offer is available in select provinces and applies to high-ratio and insurable mortgages up...

Throne Speech Giveaway Portends Faster Recovery in Rates

The boom, not the slump, is the right time for austerity at the Treasury.—John Maynard Keynes (1937) Canada’s Liberal government ripped a page out of Keynes’ playbook Wednesday, promising to use “whatever fiscal firepower is needed” to rebuild the economy and recover “one million jobs.” That includes multi-billion-dollar-price-tag initiatives like extending the Canada Emergency Wage Subsidy through summer 2021, making...

The Bank of Canada Controls Your Mortgage Rate

Bond yields heavily influence what people pay for a mortgage. In general, the more government bond-buying there is, the lower fixed mortgage rates go. Explainer: Bond prices and bond rates (yields) always move inversely. Fixed mortgage rates are benchmarked against bond yields. Governments around the world are manipulating mortgage rates by buying their nations’ own debt. Take the U.S. Federal...

We’re Floating Closer to Prime – 1.00%

—The Mortgage Report: Sept. 18— Variable Discounts Improve Further Bankers are making more dinero on floating-rate loans. That’s motivating them to cough up some profit and sharpen their variable rate pencils. Online brokers are now effectively as low as prime – 0.93% on default-insured variables in some provinces. Uninsured customers (including those refinancing) get milked for more, as usual, but...

Who Repealed the Law of Supply and Demand?

. If you want to pay less mortgage interest, it helps to have a cheaper home. If you want a cheaper home, it helps if there are more homes than people want to buy. Cue the Economics 101 reference. Yet, there are some who’d like us to believe that demand, not supply, is the problem. As if not having enough...

A New Low for 5-year Refinance Rates

—The Mortgage Report: Sept. 15— Never before has Canada seen an uninsured 5-year fixed nationally advertised for 1.84%. But on Tuesday we saw it, courtesy of Tangerine. At 1.84%, Tangerine’s rate is now just 4 basis points above the lowest nationally advertised uninsured variable rate. As usual, you’ll find even lower default-insured and insurable 5-year fixed offers if you shop...

Finally, a Major Bank Openly Promotes a Sub-2% Five-year Fixed

—The Mortgage Report: Sept. 10— CIBC has dropped the following special fixed rates: 5yr (high-ratio): 2.07% to 1.97% 5yr (uninsured): 2.24% to 2.14% 7yr: 2.71% to 2.61% It’s the first time ever that a Big 6 Canadian bank has widely and openly advertised a 5-year fixed rate under 2%, albeit it’s only on default-insured mortgages. This development is more symbolic...