Tag Archive: Bank of Canada


Going, Going…

More banks raised their internal mortgage pricing this weekend, including Scotiabank. (See: Big Bank Mortgage Rates) Its move followed TD’s fixed-rate hike on Friday. Scotia, the largest bank in the mortgage broker channel, boosted multiple fixed rates, but actually lowered its variable rates. That seems to be the playbook now as banks try to entice people to float their mortgages...

Tiff Talk

If you have faith in Canada’s top banker, Bank of Canada chief Tiff Macklem, you needn’t worry about prime rate rising in 2021. Here’s what he said in a speech on Tuesday:‎With a complete recovery still a long way off, monetary policy will need to provide stimulus for a considerable period. We have committed to keeping our policy interest rate...

Canadian Mortgage Rates Turn the Corner

People hear the Bank of Canada predicting no rate increases until 2023 and take that as gospel. Maybe they shouldn’t. The Bank of Canada’s key overnight rate—which more directly impacts floating-rate mortgages—doesn’t constrain fixed mortgage rates in the same way. The latter are driven more by what the bond market thinks the Bank of Canada (and the economy) will do...

Stress Test-Free Rental Financing

The government’s “B20” stress test has blocked countless people from buying rental properties as investments. The current 4.79% minimum qualifying rate means would-be buyers have to prove they can afford mortgage payments far above what they’d really pay. Fortunately for some borrowers, there are alternative lenders (e.g., credit unions) that don’t impose the federal stress test. They qualify borrowers on...

A Slightly More Hawkish Bank of Canada Keeps Rates on Hold

In Brief Today’s Announcement:No change to rates Overnight rate:0.25% Prime Rate:2.45% (also no change; seePrime Rate) Market Rate Forecast:No BoC hikes until late 2022 BoC’s Headline Quote: “The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved. In our projection, this does...

10-year Fixed Rates Could Rebound Quicker

If you’ve got a hankering for a mortgage with maximum rate assurance, none beats the 10-year fixed. But once Canada rounds the corner on its economic recovery, 10-year rates could climb faster than other mortgage rates. The reason: 10-year terms reflect longer-term economic expectations than 5-year terms, for example. As a result, they often react more to changes in the...

Variable-rate Mortgages Should Get Cheaper

Variable rates on new mortgages could get a little cheaper this quarter, for one of four reasons, or maybe all four: Bankers’ acceptance (BA) rates — a general proxy for variable-rate funding costs — are at an all-time low. That’s boosted the spread between prime rate and BAs to almost a 12-year high. Think of that spread as a rough...

New Tool for Monitoring Mortgage Rates

“What’s the lowest rate?” is one of those questions you can’t answer with one number. There are just too many factors that determine the rate someone pays. You have to ask more questions, like: How much equity do you have? Are you purchasing a home, refinancing, or just switching lenders? What term do you prefer? What province are you in?...

Wednesday’s Historic Events Nudge Rates Higher

The Mortgage Report: Jan. 6, 2021 U.S. 5-year yields leaped to a 7-week high on Wednesday as Democrats took control of all three houses of government, thanks to their historic win in Georgia. Canada’s 5-year yield rose in sympathy by a less notable 2 bps, but economists nonetheless expect more of an incline in rates this year. The reason: Democrats...

New Year, New Optimism, New Rate Risk

The Mortgage Report: Jan. 4, 2021 2020 was a year that took pleasure in humiliating forecasters. From the remarkable bounce in housing, to the resilience of mortgage volumes, to the devastation in big-city rental markets, to the homeowner exodus from urban cores to the lows of contract mortgage rates, to the persistence of high qualifying rates — 2020 made the...