Another year is in the history books. Man, that one went quick.
Here’s a rundown of the headlines that marked a year of flux in our business (what year isn’t a year of flux, but anyway…).
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TOP STORIES OF 2016
DoF Announces New Qualification Rules
OSFI Announces Crackdown on Underwriting
FICOM Unveils Comp Disclosure Plans for B.C. Brokers
THE YEAR’S TOP DEALS & LENDER MOVES
National Bank Shutters Broker Division
DLC Buys Invis-Mortgage Intelligence
Manulife Enters the Broker Space
RATE MOVEMENT
The foundation for Canadian interest rates is the overnight rate. It ended the year where it began, at 0.50%. The Bank of Canada hasn’t changed it for 535 straight days.
The most important benchmark for fixed-rate pricing is the 5-year government bond, and in late 2016 we were reminded of how fast 5-year yields can climb.
| Indicator | Year End | 2016 Chg |
| BoC Overnight Rate | 0.50% | No Chg |
| Prime Rate | 2.70% | No Chg |
| Discount Variable Rate1 | 2.21% | -6 bps |
| 5yr Posted Rate | 4.64% | No Chg |
| 5yr Discounted Fixed Rate1 | 2.57% | -10 bps |
| 5yr Gov’t Bond Yield | 1.07% | +34 bps |
| 5yr GIC2 | 1.45% | -5 bps |
| 30-day Bankers’ Acceptances | 0.80% | -6 bps |
| 90-day Bankers’ Acceptances | 0.89% | +6 bps |
STOCK MOVES
And finally, here’s a look at the performance of Canada’s big banks along with the public companies that make the majority of their revenue in the mortgage business.
| Big Banks |
Share Price |
2016 %Chg |
Annual Dividend |
| Bank of Montreal | $96.57 | +24% | $3.44 |
| CIBC | $109.56 | +20% | $4.84 |
| Laurentian Bank | $57.73 | +20% | $2.39 |
| National Bank | $54.53 | +35% | $2.20 |
| Royal Bank of Canada | $90.87 | +23% | $3.28 |
| Scotiabank | $74.76 | +34% | $2.92 |
| TD Canada Trust | $66.22 | +22% | $2.20 |
| Mortgage Companies | Share Price |
2016 %Chg |
Annual Dividend |
| Atrium MIC | $12.15 | +7% | $0.86 |
| Eclipse Resi. MIC | $9.80 | +1% | $0.65 |
| Equitable Group | $60.46 | +17% | $0.84 |
| Equity Financial Holdings | $9.90 | +23% | — |
| Firm Capital MIC | $13.76 | +9% | $0.94 |
| First National | $26.93 | +20% | $1.65 |
| First National MIF | $9.03 | +7% | $0.60 |
| Genworth MI | $33.66 | +27% | $1.70 |
| Home Capital | $31.34 | +16% | $0.98 |
| MCAN Mtg Corp | $14.32 | +18% | $1.17 |
| Street Capital Group | $1.88 | +40% | — |
| Timbercreek Financial | $8.72 | N/A | $0.68 |
| Trez Capital MIC | $7.90 | +0.5% | $0.70 |
1 Discounted mortgage rates reflect the average advertised rates of Canada’ top superbrokers, as of December 31.
2 RBC’s 5-year non-redeemable GIC with monthly interest is used as a proxy for GIC rates. In reality, some lenders have to pay notably more on their GICs than RBC.
