Tag Archive: stress test


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...

Scheer Promises to End Mortgage Stress Test on Switches

One of the worst mortgage policies in Canadian history could come to an end by next year. That is, if the Conservatives win the October 21 federal election. Conservative Party leader Andrew Scheer summarized the problem for the Canadian Home Builders’ Association on Friday, saying: “If you want to switch lenders you have to go through the stress test. But if...

Save for 4,635 Days. Beat the Stress Test

Just failed the mortgage stress test and feeling down? Have no fear, a bigger down payment will get you to the mortgage promised land. By putting down more, you’ll lower your debt ratio and be passing the stress test before you know it…as long as you don’t expect a mortgage before 2031. That’s how long stress test flunkies would have...

Could CMHC Close This Stress Test Loophole?

It’s no secret. Many homebuyers that had no trouble qualifying for a mortgage in 2017 are finding big challenges in 2019. As we wrote yesterday, the government’s harsher mortgage “stress test” is a key reason why. The problem is exacerbated by the banks’ refusal to lower their posted 5-year fixed rates, despite a 55-basis-point drop in the 5-year bond yield...