The latest mortgage news – Another round of fixed rate hikes are on the way

Over the past two weeks, all the major banks and countless other mortgage lenders have raised some of their fixed rates.

Meanwhile, markets are now fully pricing in a rate hike by the Bank of Canada at its March meeting, which will raise rates for variable rate holders across the country.

Here is an overview of some key rate changes to special bank rates since the beginning of the year:

TD

  • 5-year fixed (HR): 2.74% to 2.94% (+20 bps)
  • 5-year fixed: 2.84% to 3.04% (+20 bps)

RBC

  • 5-year fixed: 2.94% to 3.19% (+25 bp)
  • 3-year fixed: 2.69% to 2.94% (+25 bps)
  • 5-year variable: 1.65% to 1.70% (+5 bps)

Scotiabank

  • 5-year fixed: (HR): 2.74% to 2.94% (+20 bps)
  • 5-year fixed: 2.84% to 3.04% (+20 bp)
  • 3-year fixed: 2.64% to 2.89% (+25 bps)
  • All eHome rates increased by 30 basis points

BMO

  • 5-year fixed (RH): 2.82% to 2.92% (+10 bps)
  • 5-year fixed: 2.99% to 3.09% (+10 bps)
  • 3-year fixed: 2.69% to 2.84% (+15 bps)

CIBC

  • 5-year fixed (RH): 2.82% to 2.92% (+10 bps)
  • 5-year fixed: 2.99% to 3.09% (+10 bps)

NBC

  • 5-year fixed: 2.94% to 3.09% (+15 bp)

These moves follow a recent rise in bond yields (which typically drive fixed mortgage rates). However, since hitting a two-year high reached last week, bond yields have since retreated slightly.

To put these increases in perspective, based on an average new mortgage amount of $360,000 (according to Equifax data) and an average fixed rate of 2.94% over 5 years, each increase of 10 basis point rate results in about $19 more monthly payment, or $1,697 over a 5-year term.

As for floating rate holders, markets are pricing with near-certainty that the Bank of Canada will raise rates by 25 basis points at its next meeting on March 2, with a total of five quarter hikes. points planned by the end of the year.

Federal foreign homeowners tax will yield less than Liberals predicted

The federal government’s planned new foreign property tax will generate less revenue than originally projected, according to a new report from the Parliamentary Budget Officer (PBO).

The Liberal government, which has promised to introduce a 1% tax on vacant foreign-owned homes starting January 1, had projected tax revenues of $200 million for the 2022-2023 fiscal year, and a total of $700 million over five years.

According to BNN Bloomberg, Parliamentary Budget Officer Yves Giroux instead says the tax is more likely to raise $130 million in the first year and $600 million over the full five years.

The discrepancy is apparently due to “the uneven breadth and quality of available data” on foreign ownership in Canada.

CMHC mortgage insurance cut will cost $1.4 billion

The Parliamentary Budget Officer also released the full cost of another federal government pledge to cut CMHC mortgage insurance premiums.

During the election campaign, the Liberal Party promised a 25% reduction in mortgage loan insurance premiums required by the Canada Mortgage and Housing Corporation (CMHC).

The Parliamentary Budget Officer has indicated that the total cost of this promise will be $1.4 billion over five years, while savings for the average home buyer will be $5,341 in 2022-23, reaching 5 $863 in 2026-2027.

If implemented, the Parliamentary Budget Officer said Canada’s private mortgage insurers would likely also reduce their premiums to closely match CMHC’s.

TNM launches an exclusive “no commitment” mortgage

There’s a new mortgage product on the block. National discount broker True North Mortgage has launched an exclusive “no-commitment mortgage” for those looking for flexibility.

The product is an open mortgage, which means borrowers can pay off all or part of the outstanding balance at any time without penalty, at a low variable rate of 1.25% (premium minus 1.20).

“We are very happy to bring this product to market. Buying a home is stressful enough without the pressure of choosing the right mortgage product,” said Dan Eisner, Founder and CEO of True North Mortgage. “With our no-commitment mortgage, customers can lock in their rate at any time or have the option of paying off their mortgage partially or completely without penalty. They get the simplicity they need, with absolute freedom.

The product was made available by THINK Financial, a CMHC Approved Lender licensed by True North Mortgage, and is available for purchases, refinances and transfer transactions.

HomeEquity Bank Surpasses $1 Billion in Reverse Mortgages

Reverse mortgage provider HomeEquity Bank announced that it surpassed $1 billion in mortgages in 2021.

The lender said this represents a 28% increase in volume from 2020 and brings its total portfolio of reverse mortgages under management to $5.4 billion.

“We are excited to continue to fulfill our goal of helping Canadian homeowners aged 55 and over enjoy a financially secure retirement in the home they love,” said Steven Ranson, President and CEO. of HomeEquity Bank. “We are incredibly proud of our achievements in 2021, all of which speak to the incredible work of our talented team and the success of our business strategy.”

In September, HomeEquity Bank was acquired by the Ontario Teachers’ Pension Plan Board, subject to final regulatory approvals, which are expected in the first half of 2022.

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