Integrated Mortgage Planners
✕
  • Contact
  • About
  • Media
  • Privacy Policy
  • Blog
  • Rates
  • Mortgage Central
    First Time Home Buyer
    First-time Home Buyers
    Borrower Specific Advice
    Borrower Specific Advice
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Mortgage Calculators
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Mortgage Rate Updates
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Borrower Beware
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Product Commentary
  • About
  • Apply
Bank of Canada Governor Carney Concerned About Economic Outlook
(416) 304 0100
Bank of Canada Governor Carney Concerned About Economic Outlook
Call us
Bank of Canada Governor Carney Concerned About Economic Outlook
Bank of Canada Governor Carney Concerned About Economic Outlook
✕
  • Blog
  • Rates
  • Mortgage Central
  • About
  • Apply
  • Blog
  • Rates
  • Mortgage Central
    First Time Home Buyer
    First-time Home Buyers
    Borrower Specific Advice
    Borrower Specific Advice
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Mortgage Calculators
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Mortgage Rate Updates
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Borrower Beware
    Bank of Canada Governor Carney Concerned About Economic Outlook
    Product Commentary
  • About
  • Apply
Bank of Canada Governor Carney Concerned About Economic Outlook
(416) 304 0100
Bank of Canada Governor Carney Concerned About Economic Outlook
Bank of Canada Governor Carney Concerned About Economic Outlook

Bank of Canada Governor Carney Concerned About Economic Outlook

  • Home
  • Blog
  • Monday Morning Mortgage Rate Updates
  • Bank of Canada Governor Carney Concerned About Economic Outlook
Is the Loonie Really Just a Petro-Currency?
May 16, 2011
Mortgages for Co-op and Co-ownership Properties
May 25, 2011
Last updated on November 9, 2017
Categories
  • Monday Morning Mortgage Rate Updates
Tags

toronto mortgage ratesWhen Bank of Canada (BoC) Governor Mark Carney speaks, anyone keeping an eye on mortgage rates listens carefully. He leads the Bank’s Governing Council, which sets the overnight rate, and variable-mortgage rates move when the overnight rate moves. At the same time, fixed-income investors factor Mr. Carney’s views on the economy and inflation into what they will pay for longer-term bonds, so fixed-rate mortgages, which are priced off of the bond market, are affected as well.

On Monday of last week, Mr. Carney spoke to the Canadian Club of Ottawa (you can read his full comments here). His overriding theme was that the world’s economies are realigning, with emerging markets now accounting for nearly three quarters of the world’s economic growth, and he expressed concern about Canada’s reliance on the United States as its primary export market (we only send 10% of our exports to emerging markets). He reminded us that recessions caused by  financial crises tend to be more severe and last twice as long as other recessions, and he expressed serious concern over rising debt levels in much of the developed world. Mr. Carney said the biggest influences on rising Canadian inflation were increased household borrowing and spending, and the biggest downside pressure was coming from the persistent strength of our dollar. He then reiterated that “any further reduction in monetary stimulus would need to be carefully considered.” In other words, he’s going to think long and hard before raising the overnight rate.

On Wednesday, Mr. Carney spoke at a dinner that was supposed to be off the record, but wasn’t thanks to Avery Shenfeld, Chief Economist at CIBC World Markets, who missed the memo and emailed Mr. Carney’s comments out to his clients. Mr. Carney’s words were a bit more pointed this time as he  expressed doubts that the US would get serious about reducing its deficit before next year’s elections. He also said that the financial crisis is not over, and Canada isn’t out of the woods yet. No word on how he liked the soup.

On Friday our latest Consumer Price Index for April, 2011, was released by  Statistics Canada. Overall inflation held at 3.3%, driven primarily by rising food and energy prices. Core inflation actually dropped however, from 1.7% to 1.6%, and overall, the numbers came in a little lower than expected.

Lenders continued to inch their fixed-mortgage rates downwards last week , dropping them by an average of 10 basis points (0.1%) while the five-year Government of Canada (GoC) bond yield bounced around before finishing the week lower. The widespread belief that rates are headed nowhere but up seems to be softening, and talk of deflation, at least in the US, has re-entered the debate. This reminds me of Bob Ferrell’s 9th rule of investing – “When all the experts and forecasts agree – something else is going to happen”.

Variable-rate discounts held firm again and with posted mortgage rates at the Big 6 Banks dropping this week, the Mortgage Qualifying Rate (MQR) should drop to 5.59% today. This will make it a little easier to qualify for variable-rate financing.

The bottom line: Several of the analysts who were calling for summer rate hikes are revising their estimates, now suggesting that a fall rate rise is more likely – this is a good omen for variable-rate mortgage borrowers.

I am 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 me or apply for a Mortgage Check-up to obtain the best available rates and terms.
Share
31

Comments are closed.

Dave the Mortgage Broker
Integrated Mortgage Planners
David Larock - Mortgage Broker
Integrated Mortgage Planners Inc.
DBA: TMG Integrated Mortgage Planners Inc.
FSRA License #12867
2 St. Clair Avenue West, 18th Floor
Toronto, ON M4V 1L5

(416) 304 0100  - Phone
(888) 406 8939 - Toll Free

Contact us
Useful links
  • Contact
  • About
  • Media
  • Privacy Policy

© 2023 Integrated Mortgage Planners Inc.