Mortgage Rate News

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...

The (Ir)relevancy of 5-Year Posted Rates

Big bank posted mortgage rates are like sticker prices on new boats. Almost nobody pays them. Today’s typical 5-year posted rate is 4.64%. Were you to get stuck paying this joke of a mortgage rate, it would cost you $10,394 more interest every five years, for every $100,000 of mortgage. That’s compared to the average street rate, which is almost 220 basis points lower at 2.45%. Posted rates have...

The Threat of 10% Higher Payments

Here’s a stat that’s got debt and housing critics talking: Almost 3 in 4 homeowners say they’d suffer “financial difficulty” if their mortgage payment rose by 10%. This warning comes from a new Manulife Bank survey released today. This number is likely inflated by the fact that some survey respondents can’t accurately quantify what a 10% payment hike would do to their...

Yields Sink. Mortgage Rates Might Follow

The “Trump Bump” it was called — that 50+ basis point run-up in rates following President Donald Trump’s surprise presidential win. Well, the Trump Bump has become the Trump Dump. Bond yields dove to a 6-month low yesterday on fresh reports of White House scandals and a stock selloff. Here’s the chart: This dip in yields was triggered by investor concerns about the...

Fixed vs. Variable. The Gap Narrows

Fixed and variable rates began the year on totally different trajectories. Fixed rates were on the way up. Variable rates were on the way down. But in the last eight weeks, the gap between the two has conspicuously narrowed, with fixed rates falling up to 20 bps. That’s driven down the “insurance premium” borrowers pay for the security of a fixed rate. Canada’s lowest 5-year...