Mortgage Rate News

RBC’s New 2.94% Rate: No One’s Biting

Last week RBC threw a 2.94% 5-year fixed rate against the wall to see if it would stick. It hoped its bank peers would seize this opportunity for extra profit by raising their rates commensurately. But RBC’s trial balloon ain’t flyin. Not yet anyway. None of its peers have matched the extent of RBC’s rate hikes. Most have only raised 10-20...

RBC Now Upcharges on Longer Amortizations

What next? A major bank (RBC) is now charging extra for amortizations over 25 years. This morning RBC announced that, effective November 17, it’ll ding you an additional 10 basis points for 26- to 30-year amortizations. We don’t recall anything like this from a major bank before. “This is the first time we have introduced new pricing for clients who choose to amortize their...

This Is Not the Time to Gamble on Rates

“Lower for longer” has become the mantra in the rate market. But mantras don’t last forever. Trump is a rate market shock. He has single-handedly transformed how investors perceive North American growth prospects, inflation and default risk in the U.S. bond market. That’s driven Canada’s bellwether 5-year bond yield near one-year highs. Combine this with Ottawa’s regulatory changes, and suddenly today’s record-low...

Credit Scores Determine Your Mortgage Amount

By Chantal Chapman, Special to RateSpy If you’re a homebuyer with a down payment less than 20%, you’re now subject to Canada’s new mortgage rules. As a prospective purchaser, you probably want to know where you stand. Here’s a quick rundown… The biggest change you’ll face is the government’s new “stress test.” It forces insured borrowers to prove they can afford...

Prime Watch

It’s been over a week since TD boosted its “mortgage prime” rate in unprecedented fashion, and so far, the other banks have left TD out to dry. None of them have copied its 15 bps hike on variable-rate borrowers. If all the other banks forego this opportunity to pad their revenue, it wouldn’t be shocking, but it would be unexpected. OSFI’s new capital rules took effect for...

TD’s Mortgage Prime Hike. Just the “First Move…”

What a coincidence that TD boosted its mortgage prime rate and OSFI implemented its new bank capital requirements, both on the same day (November 1). Or not. RBC Capital Markets issued a report Tuesday suggesting the two may have been somewhat linked. It predicts further rate hikes to come: “We believe TD’s rate increase may be just the first move in a series of mortgage...

TD Jacks Up its “Mortgage Prime Rate”

In an unprecedented move by TD, the bank has raised its mortgage prime rate independent of the Bank of Canada. The country’s second largest bank has boosted its “mortgage prime” to 2.85% from 2.70%, where it has stood since July 2015. “This is the first time we’ve increased our TD Mortgage Prime rate independent of a Bank of Canada rate...

Risk Sharing & Your Mortgage

Everything’s a risk these days. You can’t even kiss your dog for risk of contracting some zoonotic disease. Even prime insured mortgages—where the odds of a borrower defaulting are less than your odds of being on a plane with a drunken pilot—are suddenly too risky. Ottawa’s mortgage police claim they’re worried about the risk of shoddy underwriting so they’re making lenders share more losses when insured mortgages...

Rate Inertia Persists (For Now)

Variable-rate holders can sit back in their easy-chair. Prime rate is cemented at 2.70% after the Bank of Canada pushed out its forecasted economic recovery for the umpteenth time. The Bank said there’s now “heightened uncertainty” in its rate outlook, as if it had any certainty before. It nevertheless has consulted its black box models, which purblindly forecast 2% growth through 2018. Two percent growth...

Biggest Mortgage Change Since the ’70s

The new posted-rate qualification rule kicked in today on high-ratio insured mortgages. It could shut out more buyers from the housing market than any single mortgage change since the late ’70s, when rates soared into the teens. That’s according to one lender veteran I spoke with this morning. The lender, who didn’t want to be identified for fear of regulator reprisal, called Ottawa’s...