{"id":17888,"date":"2025-07-09T14:01:15","date_gmt":"2025-07-09T14:01:15","guid":{"rendered":"https:\/\/finderica.com\/?p=17888"},"modified":"2025-07-09T14:01:15","modified_gmt":"2025-07-09T14:01:15","slug":"mortgage-digest-rbc-expects-no-further-boc-rate-cuts","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=17888","title":{"rendered":"Mortgage Digest: RBC expects no further BoC rate cuts"},"content":{"rendered":"
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The outlook for interest rates is becoming less clear-cut as Canada\u2019s major banks rethink how far the Bank of Canada will go in its rate-cutting cycle. While most still see room for further easing, RBC is breaking away from the pack.<\/p>\n

The bank has taken additional cuts off the table, forecasting the overnight rate<\/a> will hold steady at 2.75% through 2026\u2014making it the most hawkish forecast among the Big Six.<\/p>\n

In its latest Monthly Forecast Update, RBC said: \u201cWe no longer expect any rate cuts from the BoC this year.\u201d The bank explained that \u201cas direct trade uncertainty facing Canada recedes\u2026the inflation outlook remains uncertain,\u201d reducing pressure on the central bank to act further.<\/p>\n

That\u2019s a shift from earlier this year, when RBC still expected one more cut before the cycle ended.<\/p>\n

By contrast, Scotiabank has revised its forecast lower, now projecting the policy rate to settle at 2.25%\u2014down from 2.50% in its previous estimate. BMO, meanwhile, remains the most dovish, continuing to project a fall to 2.00% by early 2026.<\/p>\n

TD, CIBC and National Bank continue to expect a terminal rate of 2.25%, in line with the Bank of Canada\u2019s current inflation outlook.<\/p>\n

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Special pricing for Canadian mortgage pros at top U.S. mortgage tech event<\/strong><\/h2>\n

Canada Mortgage Trend<\/em>, in partnership with Mortgage Professionals Canada and National Mortgage News, is proud to support one of the most influential U.S. conferences in mortgage technology:\u00a0DIGITAL MORTGAGE.<\/a>\u00a0<\/strong><\/p>\n

Taking place\u00a0September 16\u201317\u00a0at the Loews Coronado Bay Resort in San Diego, this is the conference mortgage leaders are prioritizing\u2014because it\u2019s built by the very people shaping the future of the industry.\u00a0<\/p>\n

The newly announced\u00a0Advisory Board<\/a><\/strong>\u00a0includes senior executives from\u00a0Rocket Mortgage, Better, loanDepot, Five Star Bank, and more. Together, they\u2019re shaping a high-impact agenda focused on what matters most: AI and automation, customer experience, compliance, and the next wave of mortgage tech innovation.\u00a0<\/p>\n

Mortgage Professionals Canada members once again have access to special pricing for this year\u2019s event. Mortgage originators (banks and non-bank lenders) and mortgage broker members can save up to $700 with their exclusive discount code. To receive the code, email [email\u00a0protected]<\/span><\/strong> before registering. Canadian government employees are also eligible for a discounted government rate pass.<\/p>\n

*Discount applies to mortgage originators and mortgage brokers only and cannot be applied to previously completed transactions. Retroactive adjustments or refunds will not be accommodated.\u00a0<\/em><\/p>\n

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CMBS delinquencies edge down as payoff activity stays strong<\/strong><\/h2>\n

Canadian CMBS delinquencies ticked lower in May, with Morningstar DBRS reporting a 1.0% delinquent or specially serviced rate\u2014down from 1.1% in April and well below the U.S. rate of 7.5%.<\/p>\n

According to Morningstar DBRS, overall maturity payoff rates held at 100%, with no realized losses reported in May. Loans across all size categories and debt service coverage ratio (DSCR) tiers were paid in full at maturity or prepaid ahead of schedule.<\/p>\n

The number of loans still operating under pandemic-era forbearance also continued to decline. As of May, 19 loans with deferred balances remain, though most have resumed regular payments. Outstanding balances tied to forbearance are now concentrated in select property types\u2014particularly retail and hotel assets\u2014and are mostly located in Ontario and Quebec.<\/p>\n

Morningstar DBRS also flagged that while most COVID-impacted loans are performing again, a few continue to show signs of strain, particularly those in regions hit hard by broader economic shifts.<\/p>\n

Overall, the report suggests continued resilience in the Canadian CMBS market, with improving delinquency trends and strong repayment performance.<\/p>\n

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Courtesy: DBRS Morningstar<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n
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Ontario credit union assets edge higher in Q4, but mortgage growth remains slow<\/strong><\/strong><\/h2>\n

Ontario\u2019s credit unions continued to expand their balance sheets in Q4 2024, with total assets rising to $99.61 billion, up 3.37% year-over-year, according to FSRA\u2019s latest Sector Outlook report.<\/p>\n

Growth was led by a $1.42-billion jump in commercial lending and a 9.44% increase in cash and investments. Residential mortgage growth remained muted, up just 1.02% annually, reflecting subdued housing activity.<\/p>\n

Profitability improved slightly, with return on average assets rising to 0.24%, up three basis points from Q3, driven by lower interest paid to depositors.<\/p>\n

However, credit quality showed some deterioration. The delinquency rate on residential mortgages climbed to 0.87%, up 31 basis points from a year earlier.<\/p>\n

FSRA noted the broader debt picture is improving, as StatsCan data shows Canada\u2019s household debt-to-income ratio declined to 170.1% in Q3 2024, down from 175.0% a year earlier.<\/p>\n

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Many renters still holding off on buying, despite falling rates and prices<\/strong><\/h2>\n

More than a quarter of Canadian renters considered buying before signing or renewing their current lease, according to a new Royal LePage survey, but most ultimately chose to wait.<\/p>\n

Even with home prices softening and borrowing costs easing, 40% of surveyed renters said they\u2019re holding out for even lower prices. Another 29% are waiting for further rate cuts, while 28% say they\u2019re still saving for a down payment.<\/p>\n

Despite these hurdles, 54% of renters say they plan to buy eventually. Of those, 16% hope to do so within two years, and 21% within five.<\/p>\n

\u201cEntry-level opportunities have improved significantly,\u201d said Royal LePage CEO Phil Soper, who noted that incomes are rising and some of the least affordable cities are becoming more accessible. \u201cStill, many renters\u2026 are choosing to wait. History suggests they may be disappointed.\u201d<\/p>\n

A growing supply of purpose-built rentals and softer demand\u2014partly due to capped international student permits\u2014has also eased rental prices. According to Rentals.ca and Urbanation, average national rents for one- and two-bedroom units declined 3.6% and 4.6% year-over-year, respectively, in May.<\/p>\n

Still, affordability remains an issue. Nationally, 37% of renters spend between 31% and 50% of their net income on rent, and 15% spend more than half. Many are also cutting back\u2014on groceries, savings, or even taking on second jobs\u2014to keep up.<\/p>\n

\u201cEven with several months of decreases, rents are still significantly higher than they were just a few years ago,\u201d Soper said, calling for \u201cmeaningful policy action\u201d to restore long-term affordability.<\/p>\n

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Mortgage arrears edged up slightly in April<\/strong><\/h2>\n

The number of Canadian mortgages in arrears ticked up slightly in April, reaching 10,910 loans, or 0.22% of all residential mortgages, according to the latest data from the Canadian Bankers Association.<\/p>\n

Saskatchewan continues to report the highest arrears rate in the country at 0.53%, followed by Manitoba at 0.32% and both Atlantic Canada and Alberta at 0.27%. In contrast, Quebec (0.18%), British Columbia (0.19%), and Ontario (0.20%) all remain below or near the national average.<\/p>\n

Despite the modest increase, arrears levels remain low by historical standards, and well below the current 1.52% mortgage arrears rate in the U.S.<\/p>\n

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Next Steps: Mortgage industry career moves<\/h2>\n

\u201cNext Steps\u201d is a feature in our Mortgage Digests that highlights notable job changes and career advancements within the mortgage industry. If you have a job update to share, we welcome your submissions to keep the community in the loop.<\/em><\/p>\n

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Caroline Bacha joins Manulife Bank as National Director \u2013 Broker Channel<\/strong><\/strong><\/h3>\n
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Caroline Bacha, a seasoned professional in the banking industry, joins Manulife Bank as National Director \u2013 Broker Channel within the National Accounts team.<\/p>\n

With two decades of experience in the banking sector, Bacha brings a strong track record of broker relationship management and business development. Most recently, she served as a BDM at First National, where she was nominated for National BDM of the Year at the Mortgage Awards of Excellence.<\/p>\n

Known in the broker industry for her exceptional customer service, her business acumen as well as her tremendous communication skills, Bacha is well-regarded across the broker community. Outside of work, she is a dedicated mother of two and an avid traveler.<\/p>\n

Join us in welcoming Caroline Bacha to Manulife Bank as she begins this exciting new chapter in her career.<\/p>\n

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The latest headlines<\/h2>\n

Visited 275 times, 277 visit(s) today<\/p>\n

bank of canada rate forecasts big banks Caroline Bacha CMBs credit unions Digital Mortgage digital mortgage conference Financial Services Regulatory Authority fsra latest mortgage news Morningstar DBRS mortgage arrears Mortgage digest National Mortgage News next steps Phil Soper rbc Royal LePage Royal LePage survey<\/p>\n

Last modified: July 9, 2025<\/p>\n<\/p><\/div>\n

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The outlook for interest rates is becoming less clear-cut as Canada\u2019s major banks rethink how far the Bank of Canada will go in its rate-cutting cycle. While most still see room for further easing, RBC is breaking away from the pack. The bank has taken additional cuts off the table, forecasting the overnight rate will<\/p>\n","protected":false},"author":1,"featured_media":17889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[216],"tags":[1267,139,440,3394,417,138,2507],"class_list":{"0":"post-17888","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mortgage","8":"tag-boc","9":"tag-cuts","10":"tag-digest","11":"tag-expects","12":"tag-mortgage","13":"tag-rate","14":"tag-rbc"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17888"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/17889"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}