Tag Archive: stress test


The Door is Open to Rate Cuts, Says BoC

The popularity of fixed mortgage rates in 2019 was unmistakable. But the Bank of Canada may have moved the needle for variable rates with its comments Wednesday. Below are the week’s top 10 statements from the BoC, all of which will be of interest to any serious rate watcher. The below quotes come from Bank of Canada Governor Stephen Poloz...

Year in Review: Top Mortgage Stories of 2019

Compared to the chilling regulatory news of 2018 (i.e., the launch of OSFI’s mortgage stress test), this was a year of turnarounds in the mortgage market. For one thing, the year ended with palpable optimism in the housing sector. It was a degree of bullish sentiment that many didn’t think we’d see when 2019 began. Below we recap that and...

Morneau to Review Mortgage Stress Test Improvements

For two years, the federal government and regulators have been talking up the virtues of their mortgage stress test. So, imagine the surprise today when the Prime Minister asked the Minister of Finance to: “Review and consider recommendations from financial agencies related to making the borrower stress test more dynamic.” The request came in a mandate letter sent by Trudeau’s...

Election Predictions: Housing Impacts

On Monday night we’ll find out which “housing affordability” plan Canada gets, be it from the Conservatives, Liberals or NDP. All three parties are promising to put homes more within reach, particularly for first-time buyers. Some of their proposals are merely vote bait; some are genuinely productive. After listening to the rhetoric for weeks on end, we’ve formulated three observations. Here are...

Could the Stress Test Exacerbate the Credit Card Problem?

Mortgage debt has been in the crosshairs of federal regulators for years. But considerably less attention has been paid recently to unsecured debt—i.e. credit card—balances for which have been growing at an alarming pace. And with the 2016/2018 mortgage stress tests crimping the amount homeowners can borrow at low rates, it’s likely that even more Canadians will be forced to...

Another Major Bank Cuts its 5-year Posted Rate

A fourth major bank has cut its posted 5-year fixed rate today. This time it’s BMO. The move comes four long months after the 100+ basis-point collapse in 5-year bond yields. Such a delay in reducing posted rates after large, market-wide rate drops is unusual historically speaking, as we’ve explained previously. See the chart below for more perspective. BMO’s cut today has implications...

Mortgage Stress Test Changes in 2019

“There’s no doubt that mortgage rate declines since the start of this year have contributed to stabilize Canada’s housing market,” said RBC economist Robert Hogue in a report last week. That might be news to some, given the rates used to qualify borrowers for approval have barely moved in 2019. We asked Mr. Hogue to share what he sees and he...

Canada’s Stress-Test Rate Falls. First Time in Three Years.

The most important rate in the mortgage industry has dropped. Better late than never. The benchmark posted 5-year fixed rate has fallen from 5.34% to 5.19%. It’s the first change since May 9, 2018. And it’s the first decrease since Sept. 7, 2016, despite a 106-basis-point nosedive in Canada’s 5-year bond rate since November 8. Why it Matters The benchmark rate...

Two Big Banks Slash 5-Year Fixed Rates. 2.99% is “Officially” Here Again (Updated)

TD and CIBC just became the first Big 6 banks to advertise 5-year fixed rates below 3% since 2017. This morning, TD and CIBC chopped their advertised 5-year fixed specials by 32 basis points (to 2.97%) and 30 bps (to 2.99%), respectively. Banks seldom cut that much in one sitting. Albeit, sources tell us both banks have been selling 5-year...

Siddall vs. Taylor: Housing Heavyweights Square Off (RateSpy Editorial)

Rarely have the heads of Canada’s housing agency and largest mortgage broker association been at such odds publicly. It feels like CMHC boss Evan Siddall and Mortgage Professionals Canada (MPC) chief Paul Taylor want to get in the ring and beat the stuffing out of each other. The former published his latest in a series of missives denouncing opponents of...