Will the Bank of Canada Raise Again This Week?

Monday Morning Interest Rate Update for January 23, 2023

by David Larock

Canada mortgage rates

Most forecasters expect the Bank of Canada (BoC) to hike its policy rate by another 0.25% when it meets this Wednesday.

The Bank will also issue its latest quarterly Monetary Policy Report (MPR), which will provide detailed assessments of current economic conditions both at home and abroad.

There is some speculation that the BoC may use this MPR to explain why it is pausing additional rate increases until it has taken time to observe the impacts of the ones it has already made. (For reference, the Bank’s current rate-hike cycle is already its sharpest on record.)

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Why Softer US Inflation Doesn’t Change My View on Mortgage Rates

Monday Morning Interest Rate Update for January 16, 2023

by David Larock

Canada mortgage ratesLast week we received the latest US inflation data, for December, and the results came in at or a little below consensus forecasts.

If you are trying to figure out where Canadian mortgage rates are headed, you should pay close attention to what happens in the US. Our fixed mortgage rates move in near lockstep with their US Treasury equivalents, and the Bank of Canada’s (BoC) policy rate moves in the same direction as the Fed funds rate over time (although not necessarily with equal precision).

The same is true in many other countries. The US dollar is the world’s reserve currency, and as such, the Fed funds rate is the base lending rate for a huge swath of other interest rates across the globe. Given that the Fed is laser focused on bringing down inflation and restoring price stability above all else, the US inflation releases contain the most closely watched data anywhere on the planet right now.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Mortgage-Rate Forecast and Predictions for 2023

Monday Morning Interest Rate Update for January 9, 2023

by David Larock

Welcome back!

As per tradition, my first post of 2023 will offer some predictions and forecasts for the year ahead but first, some important qualifiers.

Forecasting is hard at the best of times, and these are not those.

Today we are living through a period of elevated volatility where myriad factors have the potential to substantially alter our economic trajectory over the next twelve months. They include:

  • The sharpest monetary-policy tightening cycle in decades
  • Russia’s invasion of Ukraine and the US/China trade war, both of which continue to intensify
  • The global pandemic’s path, particularly in China where infection rates are still surging

Here are my five mortgage-related predictions for the year ahead.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Five Posts to Kick Off the New Year

Monday Morning Interest Rate Update for January 3, 2023

by David Larock

I hope you had time to relax and recharge over the holiday season.

I will be back to my regular Monday Morning Updates next week, and in the meantime, here are links to five recent posts to get you caught up:

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

2022: The End of the Free Money Era

Monday Morning Interest Rate Update for December 19, 2022

by David Larock

Canada mortgage rates

What a long, strange trip 2022 has been.

At the start of the year, who would have believed that we would now be happy to learn that Canadian and US inflation rates were holding steady at about 7%? Or that we would be relieved, after the sharpest increases on record, when the Bank of Canada (BoC) and the Fed hiked by only 0.50% at their final meetings of the year?

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Has the Bank of Canada’s Policy Rate Finally Peaked?

Monday Morning Interest Rate Update for December 12, 2022

by David Larock

Canada mortgage ratesThe Bank of Canada (BoC) increased its policy rate by another 0.50% last Wednesday, and that means it has now risen from 0.25% on March 1, 2022 all the way up to 4.25% today.

In its accompanying policy statement, the Bank indicated that any future rate hikes will be data dependent (instead of being largely predetermined, as has effectively been the case until now).

Here are my five key thoughts relating to the BoC’s latest policy-rate announcement and from Deputy Governor Sharon Kozicki’s speech and press conference Q & A last Thursday when she provided additional context for the Bank’s current thinking:

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

The Case for Another 0.50% Bank of Canada Rate Hike

Monday Morning Interest Rate Update for December 5, 2022

by David Larock

Canada mortgage rates

The Bank of Canada (BoC) is expected to raise its policy rate when it meets this Wednesday. The only real question still up for debate is whether it will hike by 0.25% or 0.50%.

Financial markets are pricing in a 0.25% increase, but I think a 0.50% hike makes more sense.

For starters, the BoC has repeatedly said that front-loading its rate hikes will magnify their impact, and by so doing, reduce the amount of total tightening that will ultimately be required. If the Bank expects that at least another 0.50% rise is needed, why spread that 0.50% over a longer period if that will reduce their ability to cool inflation?

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Canadian Mortgage Primer: All About Trigger Rates

Monday Morning Interest Rate Update for November 28, 2022

by David Larock

Canada mortgage ratesThe term “trigger rate” has been dominating mortgage headlines of late.

Today’s post will explain how they work, assuage fears that they will trigger a US-style housing meltdown, and outline options for borrowers who are being impacted by them.

(It was a slow week for mortgage-rate news, but my Bottom Line at the end of this post will offer a quick update on where rates currently stand and my take on where they’re likely headed over the near term.)

Let’s start with some quick definitions.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Canadian Inflation Stopped Cooling Last Month

Monday Morning Interest Rate Update for November 21, 2022

by David Larock

Canada mortgage ratesLast week Statistics Canada confirmed that overall inflation levelled off in October after falling over the previous three months. That was essentially in line with consensus expectations.

Our headline Consumer Price Index (CPI) held steady at 6.9% on a year-over-year basis. The biggest contributors to last month’s inflation were higher mortgage rates and prices at the gas pump, and the most notable decelerations occurred in groceries and natural gas prices.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Champagne Corks Pop in Response to Latest US Inflation Data

Monday Morning Interest Rate Update for November 14, 2022

by David Larock

Last week we learned that US inflation slowed by more than expected in October.

The headline US Consumer Price Index (CPI) increased by 7.7% on a year-over-year basis last month. That result was down from 8.2% in September and lower than the consensus forecast of 8%.

US core CPI, which strips out the most volatile inputs to overall CPI, such as food and energy prices, fell from 6.6% in September to 6.3% last month and came in lower than the consensus forecast of 6.5%.

The market reaction was euphoric. Stock markets surged higher and bond yields plunged in response. It was as if the inflation dragon lay slain on the steps of the New York stock exchange.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

The Fed Hiked and Financial Markets Shuddered

Monday Morning Interest Rate Update for November 7, 2022

by David Larock

Canada mortgage rates

Last week was an eventful one for anyone keeping an eye on Canadian mortgage rates.

The US Federal Reserve announced another jumbo-sized rate hike, Statistics Canada released a blockbuster jobs report, and we saw a significant bond-yield rally replaced with a sharp sell-off.

Here is my take on those developments, along with a warning that we may be about to underestimate the stickiness of our current inflation pressures.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

The Bank of Canada Hikes by Less Than Expected

Monday Morning Interest Rate Update for October 31, 2022

by David Larock

The Bank of Canada (BoC) raised its policy rate by 0.50% last week. This was the Bank’s sixth hike thus far in 2022, and its policy rate has now increased from 0.25% to 3.75% over that span.

The move surprised financial markets, which had priced in a 0.75% hike, and Government of Canada (GoC) bond yields plunged in the immediate aftermath as investors recalibrated their assumptions of when the BoC will pause and where rates will peak.

In today’s post, I will offer my key takeaways from the Bank’s latest policy statement, press conference, and accompanying Monetary Policy Report (MPR).

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Why the Bank of Canada Is About to Hike by Another 0.75%

Monday Morning Interest Rate Update for October 24, 2022

by David Larock

Last Wednesday we received the latest Canadian inflation data for September, and the results mirrored the US inflation data that were released the week before.

Our overall Consumer Price Index (CPI) dropped from 7% in August to 6.9% in September on a year-over-year basis, but that decline was less than expected. The consensus forecast had overall CPI falling to 6.7%.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

What the US Inflation Surprise Means for Canadian Mortgage Rates

Monday Morning Interest Rate Update for October 17, 2022

by David Larock

Canada mortgage rates

US and Canadian bond yields continued their seemingly inexorable rise last week.

This time the catalyst was the latest US inflation data, for September, which came in higher than expected.

In today’s post I will outline the latest data and explain why they drove bond rates higher. Then I’ll share a few points to support the view that some meaningful inflation relief may finally be on the way before closing with my take on the implications for Canadian fixed and variable mortgage rates.

Let’s begin with a quick summary of the US inflation data for September:

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.

Five Mortgage-Rate Thoughts from Last Week

Monday Morning Interest Rate Update for October 11, 2022

by David Larock

Canada mortgage rates

I hope that you all enjoyed a happy Thanksgiving weekend.

There were several mortgage-related developments last week that were worth noting.

Here are my top five from that list.

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David Larock is an independent full-time mortgage broker and industry insider who helps Canadians from coast to coast. If you are purchasing, refinancing or renewing your mortgage, contact Dave or apply for a Mortgage Check-up to obtain the best available rates and terms.
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