Mortgage Rate News

HELOCs Under the Microscope Again

HELOCs have been getting a bad rap ever since the FCAC proclaimed in 2017 that “home equity lines of credit may put consumers at risk.” Bank of Canada Governor Stephen Poloz then followed soon after by including HELOCs in a speech about what keeps him up at night. Policy-makers’ concern is that HELOC rates are rising and people are using them...

The NAFTA Rate Rally is On

The wait for good news on trade is over. The U.S. and Canada reached a last-minute deal on Sunday to replace the current North American Free Trade Agreement (NAFTA). And we’re seeing the rate effects already. Canada’s 5-year bond yield, which steers fixed mortgage rates, has rallied to a fresh seven-and-a-half-year high. The new deal, called the United States-Mexico-Canada Agreement (USMCA),...

Affordability Crisis? Not Yet, RBC

“RBC’s affordability measure hasn’t been this bad since 1990.”—RBC Economics That’s according to RBC’s “Housing Trends and Affordability” report, which is making headlines across the country as we speak. But if you’re house hunting and terrified you won’t get a mortgage, don’t soil your trousers just yet. There’s a devil in RBC’s details. It’s the mortgage rates they assume in...

Mortgage Rates. The Day of Reckoning

“You better be prepared to deal with rates 5% or higher. It’s a higher probability than most people think” —JP Morgan CEO, Jamie Dimon What if interest rates surged far higher and faster than you now envision? Picture this scenario for a moment: U.S. core price inflation above 3% for the first time since 1995 U.S. unemployment at 60-year lows...

So Long, Cheap One-Year Fixed Rates

Short-term rates are taking off. TD Canada Trust, one of the last big banks with cheap short-term rates, is a case in point. TD had the lowest one-year rates of any big lender for months. Today, it boosted its posted one-year rate by 30 basis points (that’s a lot in one increase), to 3.34%. The move comes as short-maturity government...

Equifax’s Upcoming Credit Score Change

Equifax Canada recently announced it was getting rid of the “Beacon” score, which lenders use to assess mortgage applicants. It’s replacing it with the “FICO” credit score. “The FICO Score has been a critical part of the lending process in Canada for nearly 30 years,” said FICO Canada’s Kevin Deveau in a press release. So we dug a little deeper...

A “New Era” for Mortgage Rates

“Last year marked the beginning of a new era for Canadian households,” said CIBC Economics on Thursday. “For the first time since the early 1990s, interest rates on five-year Government of Canada bonds were higher than they were five years before.” The bank adds, “With that trend set to continue, we estimate that 70% of households with five-year fixed rate mortgages...

The Bank of Canada Resists Another Hike…For Now

The Bank of Canada has issued its latest rate verdict. Here’s a breakdown of today’s announcement: Rate Decision: No change to the overnight rate Prime Rate: Also no change. Prime remains at 3.70% Market Rate Outlook: One more hike this year plus two more hikes next year. The market is not fully pricing in the next BoC rate increase until December. BoC’s...

Rates Dominate the Consumer Mindset

Your mortgage rate isn’t everything, unless you’re in the majority of Canadians. A full 60% of those polled said getting the lowest rate possible is the “only thing that matters” when it comes to picking the best mortgage, CIBC found in a recent survey. That mindset is something lenders grapple with daily while trying to differentiate themselves. And with the...

What Determines Variable-Rate Mortgage Discounts?

Mortgage shoppers ask this question all the time. It’s useful information if you’re trying to discern variable rate trends. While the answer is convoluted, below is some insight into how variable-rate discounts are formed and why they change. Setting the Discount Most of the time, lenders price closed variable mortgage rates at a discount from their prime rate. There are two...