MortgageLogic.news
By Robert McLister, Mortgage Rate Analyst | Columnist
issues
Special Report: OSFI decides not to rock the boat
By now, you've likely caught wind of what OSFI decreed yesterday for HELOCs. If not, see the "What is Changing" section below.Following the announcement, industry folk were seen revelling in the streets that this is all OSFI did.Expectations were for more, po…
Will OSFI Jolt Canada's HELOC Market?
Everyone in the mortgage game is waiting and watching as Canada's banking regulator readies new mortgage and HELOC guidelines. OSFI will reveal its new policies on Tuesday June 28, hosting a media briefing at 11:30 AM ET.The regulator says its announcement wi…
Feds wage war on inflation...with stimulus. Huh?
Scotia Economics wrote itself off the Finance Department's Christmas list on Sunday, stating: "It is fair to say that fiscal policy authorities in Canada are doing nothing of any significance to slow inflation..." The Bank of Canada is pretty much alone in ba…
Popular Bank to Re-enter Mortgage Broker Market: Report Says
Reputable sources report that Tangerine will start selling mortgages through mortgage brokers by next month. The move comes nine years after its predecessor, ING Direct, left the channel.Tangerine is owned by Scotiabank, the broker channel's biggest lender. W…
OSFI and the Stress Test. Something's Gotta Give
Canada's 5-year yield has charged above 3% for the first time in a dozen years. We're now starting to see prime uninsured 5-year fixed rates breach 5%. That hasn't happened since the global financial crisis of 2008.Tack 200 bps on top of those rates (as per s…
Why inflation is the enemy of mortgage rates
Canadians are living the greatest relative inflation shock in 47 years.Consider that when CPI peaked at 12.9% in 1981, it was 132% above the 20-year average.Today, inflation is 253% above the 20-year average.When a country experiences relative inflation shock…
Why 5-year Posted Rates Just Started Moving
Well shut the front door. Five-year posted rates rose again last week.It's just the second time that's happened all year, shows Bank of Canada data. That's despite 5-year discounted rates rocketing 170 bps since January 1.Posted rates finally break outOn Wedn…
Will OSFI Jam the Brakes on HELOCs?
After years of speculation, new HELOC rules are now just days away, hints Canada's banking watchdog.Tightening credit lines is necessary, it (OSFI) argues. Household risk is elevated and HELOCs "lead to greater and more persistent outstanding principal balanc…
Prepare for appraisal trouble
When real estate markets start keeling over, time is of the essence when ordering appraisals.Leigh Walker, a 25-year appraiser and President of Lawrenson Walker Real Estate Appraisers, explains why, and reinforces what many of us already sense."With the incre…
Worst Bond Massacre Since Victorian Era
Queen Victoria was reportedly quite a resourceful investor, and she had her share of bonds. One might imagine her horror then, of watching the U.S. bond market collapse in 1842.Back then, North American bonds traded in London with a two-month lag thanks to tr…
So long to 5-year fixed rates in the 3s
This weekend marked the first time since 2010 that nationally-available uninsured 5-year fixed rates were all north of 4%.The cheapest in the land is now 4.04% from Alterna Bank. That rate is two-and-a-half times the all-time low of 1.64% set just 16 months a…
Variables Likely a Mistake for Many First-time Buyers
It should've been obvious to anyone who watched CPI and rate-hike probabilities in mid-2021. At the time, we were in the trough of a rate cycle, unemployment was diving, GDP was recovering, core inflation was hitting 12-year highs and multiple hikes were bein…
2024 could be the year of the variable mortgage
Prime rate rocketed another 50 basis points last Thursday, boosting mortgage costs by almost $500 per year for every $100,000 of floating-rate debt.And if bond market projections are any indication, those same borrowing costs could zoom another $1,500 a year …
Variable-rate mortgagors. Time to pay the piper
The Bank of Canada's puny 25 bps rate hike on March 2 was just a teaser. Buckle up for the big show. Derivatives markets are expecting a 50-bps boost in the overnight rate come Wednesday.The chart above shows how typical adjustable-rate mortgage costs could s…
Budget Flop — Mortgage Edition
The Liberals announced another $56 billion in deficit spending in Thursday's budget.It appears no one clued in our honourable Finance Minister that Canada's "official" inflation rate will soon breach 6% — three times where it should be.Fiscal stimulus counter…
Yield Inversion Changes Mortgage Strategy
"Stagflation used to be a risk. Now it's the base case." — Mohamed El-Erian, Allianz - April 1, 2022It seems like just yesterday when the yield curve last inverted. It was only two years ago in fact.And now it's happening again, a clue that locking into mortg…
Mortgage Rates Climb a Wall...Again
Mortgage Logic, Issue #2
Risk intensifies for floating-rate borrowers
Mortgage Logic - Issue #1