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 youan additional10 basis points for26- to 30-yearamortizations. 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...
“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 transformedhow 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’sregulatory changes, and suddenly today’s record-low...
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 insuredborrowers to prove they can afford...
It’s been over a week since TD boostedits “mortgage prime” rate in unprecedented fashion, and so far, the other banks have left TDout to dry. None of them have copied its15 bps hike on variable-rate borrowers. If allthe other banks foregothis opportunity to pad their revenue, itwouldn’t be shocking, but it would be unexpected. OSFI’snew capital rules took effect for...
What a coincidencethat 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 suggestingthe twomay have beensomewhat linked. It predicts further rate hikes to come: “We believe TD’s rate increase may be just the first move ina series of mortgage...
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...
Everything’s a risk these days. You can’t even kiss your dog for risk of contracting somezoonotic disease. Even prime insured mortgages—where theodds 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 claimthey’re worried aboutthe risk of shoddyunderwriting so they’re making lendersshare more losseswhen insured mortgages...
Variable-rate holderscan sit back in their easy-chair. Prime rate iscemented at 2.70% after the Bank of Canada pushed out itsforecasted 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 hasconsultedits black box models, which purblindly forecast 2% growth through 2018. Two percent growth...
The new posted-rate qualification rulekicked in today on high-ratio insured mortgages. Itcouldshut 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...
The policy dudes at the Department of Finance (DoF) havedeferred the implementation date for theircontroversial new posted-rate “stress test.” The changeapplies to low-ratio insured mortgages and gives people more time toplan a purchase or refinance. When the new ruleswere first announced, the DoF said that effective Oct. 17all insured borrowers would have to prove they can afford a higher payment...
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