Tag Archive: mortgage rates


It’s Time for a Fixed Rate

—The Happy Canada Day Report: July 1— Fixed or Bust: Canada’s lowest nationally available conventional variable rate is just nine basis points cheaper than a comparable 5-year fixed rate. That minuscule “fixed-variable” spread is now 80% narrower than its 10-year average. In other words, the market is no longer compensating new borrowers for the risk of a floating-rate mortgage. And...

Fed “not even thinking about” rate hikes

The Mortgage Report – June 10 Dot Dot Dot Plot: The U.S. Federal Reserve, which sways Canadian rates more than many realize, was more pessimistic than expected in its rate announcement today. It’s “Dot Plot” (the Fed’s official rate forecast) now projects no rate hikes for 2020, 2021 and likely 2022. It’s unlikely Canada deviates much from the Fed’s path...

Bank of Canada to Remain in Neutral

Quick Summary Today’s Announcement:No change to rates Overnight rate:0.25% Prime Rate:2.45% (no change; seePrime Rate) Market Rate Forecast:No BoC hikes until 2022 BoC’s Headline Quote:“…The Canadian economy appears to have avoided the most severe scenario…” BoC on the Economy:“…The Bank expects the economy to resume growth in the third quarter.” BoC’s Full Statement:Click here Next Rate Meeting:July 15, 2020 The...

One of Three Things Must Occur for Record Low Mortgage Rates

The Mortgage Report – May 31 And One of Them’s Bad: If you’re rooting for lower mortgage rates, one of the following must happen: Bond yields must drop to record lows Bond yields steer fixed mortgage rates and are largely a reflection of Canada’s economic (inflation) outlook Rooting for economic pain—so mortgage rates fall—isn’t exactly a patriotic sentiment, so we’d...

Bank of Canada Cuts Rates Again

The Bank of Canada has slashed its key rate for the third time this month, using what many think are its last rounds of monetary policy ammunition.

Friday’s Unemployment Number May Change the Game

Canada just witnessed its worst spike in unemployment since the Great Recession of 2009. An estimated 71,200 jobs were lost in November. And we all know what happens when unemployment bottoms and starts climbing. Rates usually drop. Is This Really the Bottom in Unemployment? No one knows what tomorrow will bring (until tomorrow). But here’s what we know: Economic cycles have...

Rates Rebound, But Lenders Being Aggressive

A new 5-year fixed will cost you more today than it did last month, but not as much as normal. Canada’s biggest banks have been boosting their advertised mortgage rates following a 1/4-point pop in their funding costs over the last two weeks. Let’s go to the charts… The following graph shows what’s been happening. It’s a picture of Canada’s...

SuperPrime Rates Could be Coming for Ultra-Qualified Borrowers

More than ever, your credit score affects your borrowing costs. The typical minimum for a decent deal is 650, but many lenders want 680 or 720 for their lowest mortgage rates, sometimes higher. As a general rule, big banks don’t discriminate as much on credit score as compared with other mortgage finance companies. Banks’ internal systems aren’t set up for...

How People Choose Between Fixed & Variable Rates

As much as academics advise against it, people (consciously or subconsciously) try to predict interest rates before choosing a mortgage. But, interestingly, they don’t look very far into the future when making these forecasts. “…Households are forward-looking over relatively short periods of time,” research shows. A 2015 international study by Cristian Badarinza, John Y. Campbell and Tarun Ramadorai found that “the...

Rates Hit 2-Month High + Other Rate Nuggets

Bond Bloodbath It was a grisly Friday the 13th in the bond market. Investors ran from bonds like they were being chased by Jason Voorhees with a chainsaw. U.S. 5-year bonds crashed (yields soared 12 bps), which drove Canada’s 5-year to a two-month high. For non-bondy types, bond selling drives up rates since the two move inversely. Catalysts for the carnage...