Mortgage rates on the rise as lending rates are cut

My variable rate's at 1.7% now...if you were on a variable before this mess you're making bank now, provided you can pay your mortgage still...

I'd imagine the economic fallout from this will last year's regardless of the outcome. The question top of mind for me is how bad will inflation get with all the money being printed around the world right now...this could really push rates up.
 
pescador said:
Every business in Canada is being hit hard by the pandemic. Not just real-estate. Unless you’re Amazon or sell bleach, or n-95’s. And do remember, this is the CBC. They seem to thrive on negativity.
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Not just CBC but an April 3rd Royal Bank Economic Report also said:
Social distancing to severely disrupt spring house hunting season
Canada’s housing market will slow to a crawl this spring as Canadians follow social distancing orders in order to combat the spread of COVID-19. We expect realtors to suspend open houses and cut any private showings to a bare minimum. Signs were starting to point toward a significant pullback even before governments stepped up restrictions on social gatherings and despite the adrenaline shot from the Bank of Canada’s back-to-back interest rate cuts this month. Equity markets’ freefall, mounting job losses, reduced work hours, the shutdown of Canada’s borders (stemming the flow of in-migrants) will hammer confidence and cool demand. Investors and speculators also are likely to sit things out for a while. There will be plenty of reasons for sellers to wait and see as well. A shock like this one is an inauspicious time to get full value for a property. We expect for-sale inventories to shrink, which will further contribute to stall activity.
 
The driving force of B.C. housing market is immigration and foreign buyers.

That’s were the pain is going to come from IMO
 
wildmanyeah said:
The driving force of B.C. housing market is immigration and foreign buyers.

That’s were the pain is going to come from IMO
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That will definitely put pressure on the B.C. market in the short and longer term. Earlier this month, Metro Vancouver real estate brokers cancelled all open houses. When houses aren’t shown they become more difficult to sell, and when houses aren’t selling the broader market suffers.

“We’re in early days still, and we’ll see how this all evolves,” said Brendon Ogmundson, chief economist at the BC Real EstateAssociation (BCREA). “It’s pretty clear that the next few months are going to be pretty rough."

Given that a vaccine is still a year away, it's difficult to see real estate stabilizing in the mean time.
 
I've heard the market is going to slow or correct for 30 years. It never really slows or corrects. It might go a little stale for 6 months, but it always trends up. My realtor has been out of control busy the last 2 months. Sold signs everywhere around here.
 
wildmanyeah said:
The driving force of B.C. housing market is immigration and foreign buyers.

That’s were the pain is going to come from IMO
Click to expand...

I dunno, if BC stays on the track it's on managing through covid we could look like the poster child for pandemic survival gold standard. I bet the real estate marketers will have that splashed off shore in no time to attract wealthy buyers into local markets once again.
 
So just got my renewal offer for my mortgage that comes up for renewal in the summer. The offer is more than what im paying now and the lending rate is 1.25% lower than last time I renewed. complete joke. Gotta love our big banks doing whatever they want. Whats the point of the boc cutting rates if the banks do whatever the fck they want?
 
Unreel said:
So just got my renewal offer for my mortgage that comes up for renewal in the summer. The offer is more than what im paying now and the lending rate is 1.25% lower than last time I renewed. complete joke. Gotta love our big banks doing whatever they want. Whats the point of the boc cutting rates if the banks do whatever the fck they want?
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What was your last rate at? I got my letter today.
 
Unreel said:
So just got my renewal offer for my mortgage that comes up for renewal in the summer. The offer is more than what im paying now and the lending rate is 1.25% lower than last time I renewed. complete joke. Gotta love our big banks doing whatever they want. Whats the point of the boc cutting rates if the banks do whatever the fck they want?
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Did they mess with the amortization schedule, or term?
 
N2013 said:
What was your last rate at? I got my letter today.
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I was at 2.6 on a 3 year. The only offer lower was variable at 2.5%. Im with td and you can go online and see what their offers are. Renewal is due by june so thinking i will wait and see if the rates drop and hopefully dont go up again. @ab1752 No but I haven't defered any payments either.
 
Posted rates and available rates are 2 different things. Banks hope you just renew because it’s easy but you get screwed cause they give you posted rates not the discounted ones. You need to be prepared to negotiate with the bank buy having a sheet from a broker showing the discounted rates. Then the bank will cooperate to keep you.
 
Always shop your mortgage.
It is better to stay with your current lender, less fees, but find the discounted rate and tell your lender that you are going to another lender offering the discounted rate.
See what they come back with.
 
Just noticed TD lowered their mortgage rates the other day, so hopefully they keep going down and other banks follow. Can anyone give me a reason not to go with a variable rate mortgage as its lower than fixed.
 
Unreel said:
Just noticed TD lowered their mortgage rates the other day, so hopefully they keep going down and other banks follow. Can anyone give me a reason not to go with a variable rate mortgage as its lower than fixed.
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Not sure what the fixed rates are at these days, but any variable you get can't get much lower with BOC Prime at 0.25. if you'd secured a variable before this mess you'd be laughing, but the variable rate's being offered right now probably aren't very attractive if interest rates rebound at all.
 
pescador said:
Every business in Canada is being hit hard by the pandemic. Not just real-estate. Unless you’re Amazon or sell bleach, or n-95’s. And do remember, this is the CBC. They seem to thrive on negativity.
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Unless they are sucking at the Liberal teat , then it’s all positive
 
Here's my 2 cents based on 25 years as a mortgage broker.

Mortgage "Fixed rates" are NOT based on the Bank of Canada. They are based on the similar Term bond market. As has been said earlier here, the Bank of Canada rate is an overnight rate and in a normal market can be changed about every 6 weeks. That said, and as we have seen, it can be changed at the will of the BoC and needs of the country's economy.

If an investor wants to place their money somewhere for an extended period of time with a known interest income, their two main options are Mortgages or Bonds. Mortgages are more risky and require more work (monthly payments, record keeping, sending statements, chasing late payments, potential defaults,...). The investor considering mortgages therefore considers the current bond yields in, world wide markets, and adds a premium for the work and risk involved in mortgage lending. Keep in mind that much of the mortgage lending in Canada is not balance sheet lending, (does not come from money the 'banks' have on hand). The bulk is from insured Mortgage Back Securities (MBS) and a surprising amount comes from non-Canadian sources. Those MBS portfolios can be quite large, $100 million $200 million or more. It's those investors who drive the mortgage rates, not Ottawa.

Because there are various sources and investors each MBS portfolio may have different requirements and rates depending on the restrictions that the investor requires. Some portfolios may require a lower return but only offer a reduced feature product with fewer services (e.g. no branch network). This is why you will see so many different mortgage interest rates on the internet. One of the most the popular lenders has as many as 32 rate buckets for just their 5 year Terms. The rate can vary with: percentage of income used to qualify, credit score, property type, Loan to Value ratio, whether a purchase or a refinance,..... For example, a purchase with less that 20% down can usually get that lender's lowest rate, Under 65% can also attract that low rate, 65% to70% is a bit higher, 70% to 75% is a bit higher, and 75% to 80% is higher yet.

Also be watchful for what each lender's "Prime" rate is. They're not all the same. TD is typically 0.15% higher than the common Prime.
 
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