The War in Ukraine Is a Potent Wildcard for Mortgage Rates

Monday Morning Interest Rate Update for March 14, 2022

by David Larock

Canada mortgage rates

Russia’s invasion of Ukraine is first and foremost a tragic tale of human suffering, but it has also sent shockwaves through the global economy.

Oil, gas, and wheat prices have spiked by more than 30%, and many other commodity prices have surged higher. The price of nickel rose so fast that the London Metal Exchange had to temporarily suspend trading last week.

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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 Thoughts on the Bank of Canada’s Rate Hike

Monday Morning Interest Rate Update for March 7, 2022

by David Larock

Canada mortgage rates

The Bank of Canada (BoC) raised its policy rate from 0.25% to 0.50% last Wednesday, as expected, and lenders increased their prime rates by the same amount shortly thereafter.

The hike was almost universally expected, but the Bank’s hawkish statements about our current conditions was not (at least by this blogger).

In his speech last Thursday supporting the policy shift, BoC Governor Macklem acknowledged the economic uncertainties surrounding Russia’s attack on Ukraine, the continued evolution of COVID-19, and the ongoing supply chain disruptions. But he said that, on balance, the BoC’s decision to start removing monetary-policy stimulus was based on the assessment that “slack in the economy is absorbed, there is solid momentum, and inflation is too high”.

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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 Is About to Start Hiking. Now What?

Monday Morning Interest Rate Update for February 28, 2022

by David Larock

Canada mortgage rates

The Bank of Canada (BoC) is expected to hike its policy rate by 0.25% when it meets this Wednesday, and if that happens, Canadian variable mortgage rates and lines of credit will rise by the same amount.

The Bank has thus far navigated through our pandemic-induced inflation run up with a strategy best described as “talk tough and drag your feet”.

That approach helped to keep longer-term inflation expectations anchored and bought time for fiscal and monetary-policy stimuli to boost our recovery. But at some point, words must be backed by actions if they are to remain credible, and that time has now come.

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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.

Top Five Recent Posts About Mortgage Rates and Inflation

Monday Morning Interest Rate Update for February 22, 2022

by David Larock

I hope that you enjoyed the Family Day long weekend.

I used the holiday yesterday for its stated purpose, so there won’t be a new post this week. I’ll be back next Monday as usual.

In the meantime, here are links to five key recent posts about Canadian mortgage rates and 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.

When Will US Inflation Peak?

Monday Morning Interest Rate Update for February 14, 2022

by David Larock

Canada mortgage rates

Last week we learned that US inflation hit 7.5% in January, exceeding the consensus forecast of 7.3% and marking a 40-year high.

The market’s reaction was as expected. US bond yields surged higher and investors raised their bets on Fed rate hikes to come.

The consensus now believes that the Fed will raise its policy rate by a total of 1.75% in 2022, and the bond futures market is pricing in a 63.7% chance of a 50-basis-point Fed rate hike at its next meeting on March 16.

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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 CDN Bond Yields Surged Despite Big Job Losses

Monday Morning Interest Rate Update for February 7, 2022

by David Larock

Toronto mortgage ratesLast Friday we learned that our economy shed 200,000 jobs in January.

Job losses were expected after our latest round of lockdowns, so the pullback didn’t come as a surprise. But the headline result was almost double the consensus forecast of 110,000, and that magnitude of loss was unexpected. The same was true of the big drop in average hours worked (-2.2%), the spike in the number of Canadians working less than half of their normal hours (620,000), and the record number of Canadians who missed work due to illness (10%).

All of that aside, the part I found most noteworthy, and instructive, was the reaction of our Government of Canada (GoC) bond yields.

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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 Will Be Live at Its Next Meeting

Monday Morning Interest Rate Update for January 31, 2022

by David Larock

The Bank of Canada (BoC) held its policy rate steady last week, and that will keep our variable mortgage rates at their current levels for a little longer.

There was widespread speculation that today’s elevated inflationary pressures would compel the Bank to start hiking, but doing so would have come at a cost (which I wrote about in this post).

Simply put, in its recent forward guidance the BoC said that it expected to raise “in the middle quarters of 2022”. Given that, hiking earlier would have cast doubt on the reliability of its future forward guidance, undermining the Bank’s most valuable asset – its credibility.

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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 Latest Inflation Data Are Not as Bad as You Might Think

Monday Morning Interest Rate Update for January 24, 2022

by David Larock

Canada mortgage rates

Last week Statistics Canada confirmed that our Consumer Price Index (CPI) rose to 4.8% in December, up from 4.7% in November.

This latest result marks a three-decade high, and the bond market is now pricing in an 80% probability of a Bank of Canada (BoC) quarter-point rate hike at its meeting this Wednesday.

I still think that outcome is unlikely, and a closer look at the latest CPI data supports that view.

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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.

Is the Bank of Canada About to Start Raising?

Monday Morning Interest Rate Update for January 17, 2022

by David Larock

Canada mortgage rates

There is widespread speculation that the Bank of Canada (BoC) will start to raise its policy rate at its upcoming meeting on January 26.

In its last several policy statements, the BoC has said that it expects to start raising “in the middle quarters of 2022”. But the drumbeat to start earlier grows louder by the day, and that has some market watchers predicting that the Bank is about to move up its rate-hike timetable.

There is a growing risk that the very fear of higher inflation will cause price pressures to intensify as people rush to buy now because they believe prices will be higher later. If the BoC believes that these inflation expectations are becoming “unanchored”, it will certainly hike later this month.

But now would be a strange time to pull the trigger.

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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 Rate Forecast for 2022

Monday Morning Interest Rate Update for January 10, 2022

by David Larock

Canada mortgage rate forecast

We begin 2022 with Canadian inflation at its highest level since 2003.

Prices have been driven higher by a combination of surging demand, fueled by generous government support payments, and supply shortages tied to the pandemic.

Both the Bank of Canada (BoC) and the US Federal Reserve have been predicting that these factors will have only a transitory impact on inflation.

The term transitory means “non-permanent”, which still appears to be the correct assessment, but it also means “of brief duration”, which hasn’t been the case.

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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.

A Busy Year-End Wrap Up

Monday Morning Interest Rate Update for December 20, 2021

by David Larock

Normally the news quiets down as we head into the holidays, but last week was packed with important updates for anyone keeping an eye on mortgage rates.

Let’s jump right in.

The Latest on Omicron

The latest data on Omicron appear to confirm what was initially suspected – that it is much more contagious, and more able to overcome vaccines.

Our infection rates have spiked, but thus far, thankfully, hospitalizations have not followed suit (see Ontario chart below, courtesy of Ben Rabidoux).Daily COVID casesThat said, although Omicron’s symptoms appear to be generally less severe, its potential impact is still concerning.

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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 BoC Rate Hikes Next Year? Don’t Think So

Monday Morning Interest Rate Update for December 13, 2021

by David Larock

Canada mortgage rates

The Bank of Canada (BoC) held its policy rate steady last week, which was widely expected.

The Bank also reiterated that it expects to begin raising its policy rate in the middle quarters of next year, to the disappointment of market watchers and bond-market investors who argued that it should move up that timing in response to heightened inflation concerns.

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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 Key Updates for Mortgage Rates Last Week

Monday Morning Interest Rate Update for December 6, 2021

by David Larock

Canada mortgage rates

Last week had five important updates that have implications for our mortgage rates, spanning from Omicron to the latest employment and GDP data.

In this week’s post we’ll go around the horn to touch on each.

  1. The Latest on Omicron

There is still a lot on uncertainty surrounding the Omicron variant and its potential economic impacts, but we did learn more last week.

First off, while it was initially hoped that Omicron could be contained, because it appeared to be caught relatively early, it has since been detected across the globe, including in Canada and the US.

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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.

Bond Yields Plunge in Response to New Outbreak Threat

Monday Morning Interest Rate Update for November 29, 2021

by David Larock

Canada mortgage rates

It was shaping up to be a quiet week for mortgage rates until it was announced on Friday that a newly identified Omicron coronavirus variant was spreading quickly across Africa, Europe, and Australia.

Omicron appears to be both more contagious and more resistant to vaccines. Epidemiologists estimate that it will take two to four weeks of testing before we will have a reliable assessment, but investors didn’t wait. They responded to the news by piling into safe-haven assets and delaying their bets on rate-hike timing.

That drove bond yields lower, and the five-year Government of Canada (GoC) bond yield, which our five-year fixed mortgage rates are priced on, plunged by 0.16% (which is a significant drop).

Friday’s news was, first and foremost, a reminder that the pandemic is a global crisis still very much with us.

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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.

Inflation Rises Again, But Not the Component That Matters Most

Monday Morning Interest Rate Update for November 22, 2021

by David Larock

Canada mortgage ratesLast Wednesday Statistics Canada confirmed that our overall Consumer Price Index (CPI) hit 4.7% in October on a year-over-year (YOY) basis.

That result marked our highest inflation rate in nearly twenty years but the bond yield surge that followed was nevertheless short lived.

The five-year Government of Canada (GoC) bond yield which our fixed mortgage rates are priced on finished the week lower than where it had started.

There were several reasons for this.

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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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