By The Spy on
January 24, 2021
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...
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By The Spy on
January 19, 2021
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...
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By The Spy on
January 14, 2021
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...
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By The Spy on
January 4, 2021
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...
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By The Spy on
December 3, 2020
Never in history has a Canadian bank advertised a mortgage rate with a zero to the left of the decimal point. Fortunately, there’s a first for everything. Effective December 4, 2020, HSBC Canada—who’s made a name undercutting its big bank competition—is launching the lowest rate in Canadian history: 0.99%. This is a milestone rate, akin to landmark rates like BMO’s...
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By The Spy on
November 30, 2020
—The Mortgage Report: Nov. 30— Trudeau’s government said Monday that it plans to lift Canada’s debt ceiling by up to 57% as it embarks on record spending and deficits in the name of pandemic relief. Canada’s historic deficit just keeps on climbing. It’s now estimated at $381.6 billion for the current fiscal year, up from $343.2 billion this summer and...
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By The Spy on
November 17, 2020
—The Mortgage Report: Nov. 17— Remember that rate: 8 3/4%? Your average first-time buyer wouldn’t, as he/she would’ve been just seven years old at the time (1991). 8.75% was a tremendous 1-year fixed rate back then. But man, did it take a bite out of people’s budgets. Consider that on a standard $100,000 mortgage, you would’ve paid: $811 a month,...
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By The Spy on
November 14, 2020
—The Mortgage Report: Weekend Edition— Canada’s rate outlook got a boost this week from two influential developments: Promising vaccine news (20 potential vaccines are in late-stage trials, including Pfizer’s drug that’s reportedly over 90% effective), and The widespread acceptance of Joe Biden’s presidential victory. This much-needed dose of good news led investors to sell government bonds, which is typical when...
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By The Spy on
November 9, 2020
Bond yields shot up like a cannonball after news broke this morning of Pfizer’s positive vaccine trials. Canada’s 5-year swap rate, one of the best leading indicators of fixed mortgage rates, sailed to a 5-month high. Now, everyone’s trying to figure out how long it’ll take before this translates into above-target inflation, which would be the Bank of Canada’s trigger...
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By The Spy on
October 30, 2020
—The Mortgage Report: Oct. 29— 1.29% is now the variable rate to beat, in Ontario at least. This new rate is: effectively equivalent to prime – 1.16%, a discount we haven’t seen since the COVID implosion last March 11 bps below the lowest 5-year fixed in the province (that being 1.40% for default-insured mortgages). Unfortunately, 1.29% is only available on...
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