Mortgage Rates

Following the collapse of Silicon Valley Bank last month, there has been some speculation that we could see the Bank of Canada cut their rate as early as June of this year. The news had rattled not just the US banking industry, but the financial industry around the globe. Bond yields immediately plummeted which resulted in significant downward pressure on fixed mortgage rates … which began to drop shortly thereafter.   However, now that the dust has settled, the chances of t

The Bank of Canada announced this morning that they are holding their rate for the second straight time. Each time they leave it unchanged puts us one step closer to the moment everyone has been waiting for…. a rate cut, which is expected to lead to a new, downward trend in prime rate. But this doesn’t guarantee that the cuts are just around the corner. In fact, the word ‘guarantee’ and economic/rate forecasts do not belong together.  As always, there are no guarantees, and a

Variable rate mortgages have historically outperformed fixed rates most of the time. But that doesn’t mean they always win. If they did, then no one would even consider a fixed rate mortgage. Yet history has shown fixed to be the more popular choice. Why? People like fixed rate mortgages as it gives them peace of mind in knowing that their rate and payment will not change over the term. For some, the mere thought of a rate increase on a variable rate product is enough for the

It is no big secret that a recession is all but inevitable at this point. The sharp and rapid rate increases from the Bank of Canada in 2022 were far greater than anyone expected. This alone had the R word written all over it. To add fuel to the recessionary fears, the collapse of Silicon Valley Bank pretty much hammered it home. I don’t see how it could be avoided at this point. While the threat of a recession continues to build, inflation is still the number one priority fo

Immediately following the news on the collapse of Silicon Valley Bank in the US, bond yields plummeted by roughly 19%. This put immediate downward pressure on fixed mortgage rates. But that doesn’t mean a rate drop is guaranteed. Logically speaking, a 19% drop in bond yields would result fixed rates dropping by 19%. That would have resulted in rate cuts of 0.90% to 1.00%. Instead, we’ve seen fixed rates drop by around 3% (equal to a 0.15% drop in rate), and that’s only with a

It’s amazing the impact that news can have on mortgage rates. Up until Thursday of last week there was upward pressure on fixed rates which was building quickly. We had already seen them increase over the last few weeks, and the precipitous upward trend in bond yields continued to pressure fixed mortgage rates to move even higher. That is… until the news broke informing us of the collapse of Silicon Valley Bank in the US, shocking the banking world and rattling consumer confi

In this morning’s scheduled rate announcement, the Bank of Canada confirmed that they are leaving their rate where it is. Finally! Exactly what variable rate mortgage holders wanted to hear. This is the first time they have maintained their rate since January 26, 2022. After eight consecutive rate hikes, six of which were oversized, it’s nice to see that they are staying put.  In their last announcement on January 25 th the BoC stated that they were pausing rate hikes. It’s

With much stronger employment statistics coming out of both the US and Canada earlier last month, bond yields started to soar which have resulted in fixed mortgage rate increases across the board. While I would love to tell you that fixed rates have stabilized, further increases are not only possible, but likely. Anyone with a mortgage coming up for renewal or those with a purchase closing within the next 120 days should get a rate locked as soon as possible if they have no

Given the significant increases to mortgage rates over the past year, it may go without saying that many are feeling the pinch. Particularly those in variable rate mortgages and those with mortgages coming up for renewal . Seeing your payment increase by hundreds (or more) per month can be stressful for anyone. Afterall, it’s not like you’re getting anything for that extra money. But it can be more than just stressful. It can have a significant impact on your quality of life

In the Bank of Canada’s rate announcement on January 25 th , they told us exactly what we wanted to hear. They are pausing rate hikes. Their report stated that they expect inflation to reach 3% by the middle of this year and back to their 2% target in 2024, which was on track with their previous projections. All great news. But as many have learned over the past year especially, forecasts can and do change. No one predicted the pandemic which resulted in the Bank of Canada sl

At the beginning of 2022, economists were forecasting that the Bank of Canada's overnight rate would increase four to five times, all at the standard 0.25% per hike. This would have meant a total rate increase of 1.00% to 1.25% for the year. Instead, we saw it increase by a whopping 4.00% with an additional 0.25% at in late January 2023. Seven increases in 2022 with six being oversized (greater than 0.25%) which is what caught everyone off guard. Prior to 2022, the last overs

The Bank of Canada increased their policy rate by another 0.25% this morning which should not have come as a surprise.  This means that the prime rate will be increasing from 6.45% to 6.70% which is the highest it has been since 2001. Through the third and most of the fourth quarter last year, none of the big six banks were forecasting increases in 2023. However, with inflation being stickier than expected, forecasts started to change later in the year. The closer we got to t

High levels of debt can significantly eat into monthly cash flow which can take a toll on many households. Particularly those who are living paycheque to paycheque. Rising inflation is not making it any easier. There may be ways to utilize the equity in your home to significantly reduce your debt payments to increase your cash flow, which can give you a bit more breathing room financially. The average non-mortgage debt per Canadian consumer rose to $21,183 in the third quart

Happy New Year! 2022 was another interesting year to say the least. One year ago, it was expected that we would see the Bank of Canada increase rates by 4-5 times by the end of the year. Given that the standard size increase is 0.25%, this would have meant a hike of 1.00% to 1.25% at the most.  Boy, was everyone wrong. Instead, we saw it increase by a whopping 4%. More than anyone could have imagined. 2022 was a tough time for anyone in the game of forecasting rates and I don

Rising mortgage rates have affected the purchasing ability for many prospective homebuyers. Some have found themselves shut out of the market entirely. This problem could be easily solved by making changes to the mortgage stress test, or abolishing it all together as some are calling for. The combination of soaring home values and rising interest rates is putting the dream of home ownership out of reach for far too many people. But is changing or removing the stress test a

Rising mortgage rates are a concern to many. Particularly those who are in variable rate mortgages with an adjustable payment (ARM), or for those who have a mortgage that is coming up for renewal . While everyone had to pass the mortgage stress test to ensure they would still qualify with higher payments in a rising rate environment, watching your monthly cash flow shrink considerably doesn’t make it any easier. Some may be worried about their ability to pay their bills on

This morning was the Bank of Canada’s final rate announcement of the year, where they confirmed that they will be increasing their overnight rate by another 0.50%. This means that prime rate will now be increasing to 6.45%. This wasn’t surprising as the hike was expected by all industry professionals. The only debate was whether it would rise by 0.50% or by the standard 0.25%. By going with the full 0.50%, the Bank of Canada is reducing the chances of additional hikes in 2023

It’s hard to imagine that a 2.49% mortgage rate was considered high just one year ago. We became spoiled with the pandemic driven sub-2% rates available during the latter half of 2020 and the majority of 2021. When the real estate market peaked in February 2022, the average 5 year fixed rate climbed back to 2.79%....exactly where it was when the pandemic began in early 2020.    It continued to increase from there. As of today, It’s at 5.14%. Yes, rates are substantially highe

Whether you’re a first-time home buyer or a home buying veteran, mortgage terminology can be confusing and it’s not uncommon for terms to be misused. It can be difficult enough going through the different options to determine the best mortgage for you .  Let alone, trying to get the mortgage terms straight as well. One of the most common misused terms is ‘conventional mortgage’, which is often used to refer to a mortgage that will not be registered as a collateral charge . Bu

Back in early 2022, there were forecasts indicating that the Bank of Canada would increase their rate by as much as five times before the end of the year. All at the standard 0.25% per increase, which would have put the prime rate at 3.45% to 3.70%. They couldn’t have been more wrong. We’re at six increases to date, all oversized except for the first of the cycle back on March 2 nd .  The prime rate currently sits at 5.95%, a whopping 2.25% higher than the original forecast