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Tangerine Now Leads the Uninsured Mortgage Market on Several Rates

  • Tangerine has ratcheted up its competitiveness. For non-default insured mortgages, it is suddenly the national leader on four fixed terms:
    • 2-year fixed at 1.64%
    • 3-year fixed at 1.59% (lowest refi rate in the country)
    • 4-year fixed at 1.69%, and
    • 10-year fixed at 2.14%.
  • These are exceptional rates for uninsured mortgages (which include refinances and purchases over $1 million), particularly if you’re looking for a shorter, more flexible fixed term or the longest term available at a fair price. Tangerine has:
    • some of the best prepayment privileges in Canada (25% annually)
    • 120-day portability (many of the lowest-rate lenders only give you 30 days or less), and
    • a 120-day rate guarantee
    • a blend-and-extend option for existing variable-rate mortgage customers who want to refinance into a lower variable rate, at anytime without penalty.
  • It’s also dropped its variable rate to prime – 1.00% (1.45%), which is the lowest advertised uninsured floating rate in Canada, save for HSBC’s prime – 1.06%. And here’s a little-known benefit of Tangerine. Its variable rates adjust up to three months after the Bank of Canada hikes rates. Other things equal, that and semi-annual compounding will save you more interest than most other floating rate products.
  • And don’t forget its HELOC. After 10 months, Tangerine is still defying expectations by maintaining Canada’s lowest advertised HELOC rate, prime – 0.10% (or 2.35%). It’s held that rate steady despite recession-related mortgage risk, a record unemployment spike and surging funding costs last spring. If you need a simple, low-cost HELOC, there really is no better option that we’re aware of today.
  • This link has all of Tangerine’s latest mortgage rates.

Floating Rates Dip

  • A few weeks back, the Spy forecast that variable rates (on new mortgages) would decline. And they have. The average variable at a mainstream lender is down about 5 bps in the last 10 business days. That’s thanks to a whole slew of lenders taking advantage of favourable margins to cut their floating rates. That includes some major banks that have lowered their variables on a discretionary basis.
  • That doesn’t mean it’s time to run right out and float your mortgage. It does mean that you’ll save about $700 over five years if you planned to go variable and haven’t closed yet.

This & That

  • Rate leader HSBC has raised the following special rates:
    • 5yr fixed (switch):  1.59% to 1.64%
    • 5yr fixed (high ratio):  1.39% to 1.44%
    • 5yr fixed (refi): 1.64% to 1.69%
    • 5yr variable (insurable): 1.34% to 1.39% (P – 1.06%)
      These hikes may be partly related to how busy HSBC’s become, thanks to headline rates like its 0.99% variable. Its return to the broker market may be a factor as well.
  • “We continue to think that the BoC moves the forward guidance date [for policy tightening] from 2023 to H2-2022 later this year,” says RBC Capital Markets.
  • “We have become increasingly convinced of the prospects for exceptional growth this year,” Bank of America said today. It raised its U.S. GDP forecast to 6% (that’s lofty for a GDP estimate). It also hiked its 10-year bond yield forecast by 25 bps. It now sees the 10-year yield, the most-followed bond yield on earth, at 1.75% by year-end—69 bps higher than today.

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