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Mortgage Bytes

Mortgage News

  • 40-year-amortization-deadline Just 45 days remain before 100% financing and 40-year amortizations come to an end.  (For the most part anyway…They’ll still be available on non-government backed mortgages.)  As a reminder, when the insurers cap their loan-to-value ratios at 95% in October, high-ratio borrowers will still be able to tack on insurance premiums to their mortgages.
  • 57% of Canadians claim they’d use extra money to pay down their mortgage whenever possible.  The number is 65% in Quebec.  National Post

Interest Rates

  • The Bank of Canada meets Wednesday.  Most expect them to keep rates as is.


Chart above courtesy of TD.

  • “I don’t know too many traders who really believe that we are going to see a cut in interest rates before the end of this year.” – National Bank fixed income trader, David Duggan  CEP
  • Scotia Capital is looking for a 1/4% rate cut in the wake of Friday’s weak GDP data. FXStreet
  • “It confirmed that the economy all but stalled in the first half of the year, and has little momentum heading into the second half. It opens the door, a crack, for a possible rate cut, not [Wednesday], but possibly in the fall.” – BMO economist, Sal Guatieri
  • “The bond market is hoping for a rate cut or two from the Bank of Canada before year-end…We continue to expect the next move will be a hike in 2009, the start of a 100-bp tightening round.” – CIBC
  • “We expect the BoC to stand pat and leave the overnight interest rate unchanged at 3.00% at its upcoming meeting on Tuesday Sept. 3rd.” – TD

Lender News

  • BMO BMO said “new originations outpaced the impact of exiting from the broker mortgage channels.”  On the other hand, BMO said its mortgage market share tumbled 1.48% compared to last year as “broker mortgages continue to run off.”   Its earning assets also decreased, partly because of BMO’s exit from the broker channel.
  • Scotiabank’s interest margin (spread) declined last quarter versus 2007 due in part to a consumer shift to variable-rate mortgages, as well as higher “wholesale funding” costs.
  • RBC said it’s mortgage market share rose 0.19% over the last year.  The average loan-to-value of an RBC mortgage was 69% as of last quarter.
  • Merix now has $5 billion of mortgages under administration.  Not bad for a company less than three years old.
  • Abode Mortgage’s “Ride for the Cure” raised $36,000 for the Canadian Cancer Society.  Well done guys!
  • Canadian Tire had $67 million of mortgages on its books as of last quarter.

The Real Estate Market

  • canadian-home-sales Over 80,000 Canadians listed their homes for sale in July–a new record for any month.  REI
  • Canada’s average home price was $302,298 in July.  One year ago it was $309,885 according to CREA.
  • “For those who live in Canada’s major urban centres and have dreams of home ownership grander than a 435-square-foot shoebox on the second floor facing an alley, a few bad years for real estate would be helpful.” — Vancouver Sun
  • The Globe suggests real estate around Vancouver’s new Skytrain line might be worth looking at.


  • US-Mortgages The Globe says bring cash if you’re buying in the U.S. because financing’s getting tougher there for Canadians. That’s somewhat true, but sources we talk with say it depends on where you’re buying. One lender, for example, was recently offering Canadians 70% financing with no credit checks, no pre-payment penalties, and a 4.25% variable interest rate.
  • Here’s a story on income property financing by CEP.
  • FSCO is hosting webinars to prepare Ontario agents for new mortgage regulations that take effect January 1, 2009.  On October 16 FSCO will run a webinar on disclosure of potential conflicts of interest. On October 23 they’ll offer one on disclosure of suitability and risks.
  • Here’s a link to monthly mortgage backed securities reports by CMHC.