Fixed mortgage rates are trending lower again after a spike in bond yields last week prompted some mortgage lenders to raise certain rates.
National Bank is the latest major bank to lower its posted special interest rates this week, following rate cuts by BMO and TD Bank last week. Rate cuts averaged 5-10 basis points (0.05%-0.10%), with TD cutting its three- and five-year unguaranteed rates by 30 basis points (0.30%).
Many other mortgage lenders also resumed rate cuts this week, following a decline in yields on Government of Canada bonds, which typically lead the way for fixed mortgage rates.
As of Tuesday's close, the yield on five-year Canadian government bonds was 3.46% down from 3.60% last week.
The decline in bond yields was triggered by weak jobs data last week which revealed the unemployment rate had risen to 6.4%.
That's 1.4 percentage points higher than the January 2023 trough, mortgage broker and commentator Dave LaRocque noted.
“This is noteworthy because an unemployment rate increase of more than 1 percentage point typically portends an economic downturn,” he wrote in his latest blog post.
“Interestingly, government bond yields have been volatile recently but still fluctuating within a range and continue to move back towards current levels,” he added.
For today's mortgage shoppers, LaRocque continues to recommend the three-year fix, which combines a competitive rate with a short fixed term.
“The premiums required for one- and two-year fixed rates are still quite high,” he noted. “Five-year fixed-rate terms are being offered at lower rates, but I worry that a five-year fix is too long when interest rates are near the peak of the cycle.”
Nationwide mortgage delinquency rates fall
Surprisingly, Canada's national delinquency rate fell slightly in April, according to data from the Canadian Bankers Association.
The delinquency rate, which measures the percentage of mortgages that are more than three months behind on their repayments, fell to 0.18% from 0.19% in March, down from the same level in March. The latest figures show that just 9,252 loans were in arrears out of a total of more than 5.02 million.
The national average delinquency rate is trending up from a 2022 low of 0.14%, but remains well below the highest recorded during the pandemic (which peaked at 0.27% in June 2020).
Delinquency rates are highest in Saskatchewan (0.56%), but have declined for four consecutive months from a high of 0.60% in January. The lowest delinquency rates are in British Columbia (0.16%, +0.01%) and Ontario (0.13%, unchanged).
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HomeEquity Bank CEO takes on new role
Katherine Dudchuk has officially taken over as CEO of HomeEquity Bank.
Datszak took over as CEO on May 1, succeeding Stephen Ranson, who announced his retirement in April after leading the bank for 25 years.
With more than 30 years of experience in financial services, Dudtschak brings a wealth of knowledge to HomeEquity Bank. Prior to this role, she held several senior management roles at RBC where she demonstrated a strong commitment to customer-centric growth and innovation. Her appointment is expected to maintain the bank's focus on providing tailored financial solutions to Canadian homeowners aged 55 and over.
“The current economic and social situation means more Canadians than ever are aging with debt, limited cash savings and dwindling pensions. They look to the assets and savings they've built in their beloved homes as a path to continued independence and dignity,” Datouszak said in a statement.
“The 55-year-old and older demographic represents the largest demographic in Canada, and HomeEquity Bank is committed to understanding and serving the diverse needs of this vibrant and dynamic demographic,” she added.
Laura Shelton Joins Strive as Vice President of Marketing
Marketing expert Laura Shelton has joined Strive as its new vice president of marketing.
Most recently, he served as senior manager of BMO BrokerEdge, where he played a key role in overseeing the launch of the bank's new broker channel.
“With nearly 20 years of experience in the mortgage brokerage industry, I am excited to join the Strive team and continue to deliver a 'better lending experience' to both prime and aspire (non-prime) mortgage borrowers,” Shelton said in a statement. “I love the fast-paced environment where everyone works toward a common goal.”
Shelton has extensive industry experience, having previously served as director of marketing and communications at Mortgage Professionals Canada and marketing director at Street Capital Bank of Canada.
Consumer confidence hits four-week low
Consumer confidence fell this week on weakening views on the economy and real estate, according to a weekly Bloomberg/Nanos survey.
The expectations sub-index, which looks ahead to the future, fell to 52.82 from a recent high of 54.04 early last month. For comparison, the average for 2024 is 52.42, just above the 49.21 recorded in 2008, the worst year on record.
“Canadian consumer confidence continues to hover in slightly positive territory,” said chief data scientist Nanos. “Notably, there is downward pressure on the readings regarding future real estate values and perceptions of the future strength of the Canadian economy.”
Looking at specific indicators of consumer confidence, sentiment towards the Canadian economy deteriorated to 18.48 from 19.07 the previous week, while sentiment towards real estate fell to 46.42 from 47.77 last week and 49.09 four weeks ago.
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big banks Canadian Bankers Association CBA consumer confidence fixed mortgage rates falling fixed mortgage rates home equity bank interest rates Katherine Dudchuk Laura Shelton mortgage delinquencies Nanos consumer confidence Nick Nanos Strive Capital
Last updated: July 10, 2024