{"id":10207,"date":"2025-02-15T00:38:53","date_gmt":"2025-02-15T00:38:53","guid":{"rendered":"https:\/\/finderica.com\/?p=10207"},"modified":"2025-02-15T00:38:53","modified_gmt":"2025-02-15T00:38:53","slug":"mortgage-digest-5-big-banks-cut-fixed-mortgage-rates-following-bond-yield-drop","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=10207","title":{"rendered":"Mortgage Digest: 5 big banks cut fixed mortgage rates following bond yield drop"},"content":{"rendered":"
\n

Despite having risen since the start of the month, bond yields are still down by more than 50 basis points (0.50%) from their January highs.<\/p>\n

Since bond yields influence fixed mortgage rate pricing, BMO, CIBC, RBC, TD and National Bank responded with rate cuts across all mortgage terms ranging between 0.10% and 0.25%.<\/p>\n

The big banks aren\u2019t the only mortgage providers responding to lower yields; countless others having been dropping rates over the past two weeks. <\/p>\n

\n
\"GoC<\/figure>\n<\/div>\n

Rate expert Dave Larock highlighted that bond yields have been pushed lower by the growing concerns over a potential trade war with the U.S. However, he cautioned that these same economic pressures could lead to rising rates if inflation resurfaces.<\/p>\n

\u201cBond-market investors have initially reacted to the trade war threat by pushing down bond yields, but tariffs are fundamentally inflationary,\u201d he wrote in his latest blog<\/a>. <\/p>\n

\u201cIn the medium \u00a0term, if higher prices persist, and if opportunistic companies enact non-tariff related price increases, price pressures will broaden,\u201d he added. \u201cIn that scenario, both bond yields and the fixed mortgage rates that are priced on them will rise.\u201d<\/p>\n

Ron Butler of Butler Mortgage agrees, telling Canadian Mortgage Trends<\/em> that the latest forecasts out of the U.S.\u2013for only one quarter-point cut at the end of the year, or potentially no more at all\u2013are likely to drive conventional rates higher again by another 20 bps. <\/p>\n

However, he expects mortgage competition to remain fierce heading into the upcoming spring market. <\/p>\n

\u201cI fully expect banks to be very competitive in the spring real estate market. RBC & CIBC are non-broker channel lenders who seem determined to gain share & hold onto all their renewals,\u201d he said. <\/p>\n

\u201cBanks are prepared to compete on every mortgage term, including high-ratio, and I do not believe that will change,\u201d he added. <\/p>\n

As we recently wrote, 5-year variable rates are now nearly on par with fixed equivalents following six consecutive rate cuts from the Bank of Canada. This means borrowers are increasingly faced with the decision of weighing potential savings against the heightened market volatility.<\/p>\n

\n
\n

Mortgage broker industry sets record by raising $775,000 for cancer research<\/h2>\n

The mortgage industry has made fundraising history, raising $775,000 for cancer research through the Strike Out Cancer campaign.<\/p>\n

As we previously reported, the fundraiser followed 2023\u2019s inaugural event, and saw 45 corporate sponsors in the mortgage industry partner with the Princess Margaret Foundation to host bowling events in nine locations across Canada.<\/p>\n

Don Stoddart, founder of the Strike Out Cancer initiative, previously told CMT<\/em>, \u201cIt\u2019s incredible how one small thought could turn into such a miracle. People really stepped up; it\u2019s really been quite rewarding.\u201d Stoddart founded the event after losing several loved ones to cancer, aiming to honor them through fundraising efforts.<\/p>\n

The funds raised will contribute to vital cancer research.<\/p>\n

\n
\"Strike<\/figure>\n<\/div>\n
\n

Insolvent homeowners see sharp decline in home equity<\/h2>\n

Insolvent homeowners in 2024 experienced a dramatic drop in home equity, with the average equity value now just 10%, down from 21% a year earlier, according to data<\/a> from Hoyes, Michalos & Associates Inc. These homeowners carried an average mortgage of $555,853, and one in seven (14%) now face negative equity.<\/p>\n

The percentage of insolvent debtors who owned a home remained low at 5%, slightly up from 4% the previous year. In addition to their mortgages, these homeowners owed an average of $99,429 in unsecured credit and $34,108 in non-mortgage secured debt.<\/p>\n

\u201cFinancial stress among homeowners is expected to escalate due to higher mortgage renewal rates, potentially doubling the proportion of homeowner insolvencies to 8-10%,\u201d the report notes.<\/p>\n

Credit card debt among insolvent Canadian debtors also reached a record high of $20,398, up 26% from last year, while total debt for insolvent debtors also rose 12% to $60,678, the largest annual rise since the study began in 2011. <\/p>\n

\n
\"Average<\/figure>\n<\/div>\n
\n

National Bank completes acquisition of Canadian Western Bank<\/strong><\/strong><\/h2>\n

National Bank of Canada officially completed its $5.6 billion acquisition of Canadian Western Bank (CWB) earlier this month after receiving final regulatory approval.<\/p>\n

The deal marks National Bank\u2019s most significant expansion into Western Canada, enhancing its presence in key markets such as Alberta and British Columbia.<\/p>\n

\u201cThis transaction will allow us to deliver a stronger banking choice for all Canadians and Canadian businesses. Our combined organization will provide customers with an expanded product and service offering nationally, while maintaining regional expertise,\u201d said Laurent Ferreira, President and CEO of National Bank. \u201cWe will pull strengths from our collective network and further extend the depth and breadth of our banking capabilities.\u201d<\/p>\n

The acquisition by National Bank of Canada will bring 65,000 new customers and nearly 40 branches under its umbrella.<\/p>\n

\n

RPS index reports 4.65% YoY increase in national home prices<\/strong><\/h2>\n

Canada\u2019s residential real estate market is showing positive momentum, with the RPS House Price Index reporting a 4.65% year-over-year increase in national home prices as of January. <\/p>\n

\u201cRecent consecutive interest rate cuts by the Bank of Canada have injected renewed energy and optimism into Canada\u2019s residential real estate market, leading to a surge of new listings across much of the country,\u201d the report notes. \u201cThis activity reflects sellers\u2019 hopeful anticipation of buyers looking to take advantage of lower mortgage rates as we approach the spring market.\u201d<\/p>\n

While sales activity has remained stable or slightly lower compared to last year, many markets are seeing stable to moderate price increases month-over-month. <\/p>\n

Quebec led the way with prices up 17.26%, followed by Calgary, Edmonton and Winnipeg, where the index was up just over 10%. <\/p>\n

Toronto and Vancouver experienced more modest gains of 2.51% and 2.22%, while Victoria remains the only major market still seeing negative growth, though it\u2019s slowly edging closer to positive territory.<\/p>\n

\n
\"January<\/figure>\n<\/div>\n
\n

Mortgage snippets<\/h2>\n
\n
\"Mortgage<\/figure>\n<\/div>\n