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We’re about to turn the page on 2018, and many may feel not a moment too soon.

Climbing fixed rates weren’t the only thing making mortgages less accessible in 2018. This was the first full year to measure the impacts of new federal mortgage rules. Provincial policies in B.C. and Ontario also contributed to putting the brakes on the country’s housing momentum.

Those and other headwinds marked an eventful 2018. Here’s a rundown of the year’s top stories, rate movements and mortgage-related stocks.

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TOP STORIES OF 2018

Rising Bank of Canada interest rates

Government policy changes work their way through the mortgage market (including B.C.’s housing measures)

Canadian real estate hits a slump

 

THE YEAR’S TOP DEALS & LENDER MOVES

DLC founders make play to re-take control of their company (but the offer as presented falls through)

Equitable Bank launches PATH Home Plan

BMO’s deep prime – 1.00% variable rate spring promo

 

TOP NEW PRODUCT OFFERINGS

Equitable Bank’s aggressive move for reverse mortgage broker share

Merix Financial’s interest-only product

Improvements to Newton Velocity as it competes for market share

 

RATE MOVEMENT

The foundation for Canadian interest rates is the overnight rate. It ended the year 0.50% higher than where it began.

The most important benchmark for fixed-rate pricing is the 5-year government bond, and in late 2018 we were reminded of how quickly 5-year yields can tumble.

Indicator Year End 2018
Change
BoC Overnight Rate 1.75% +0.75%
Prime Rate 3.95% +0.75%
Discount Variable Rate1 2.92% +42 bps
5yr Posted Rate 5.34% +35 bps
5yr Discounted Fixed Rate1 3.49% +47 bps
5yr Government Bond Yield 1.88% +2 bps
30-day Bankers’ Acceptances 2.25% +84 bps
90-day Bankers’ Acceptances 2.24% +72 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
2018
% Change
Annual
Dividend Yield
Bank of Montreal $89.34 -11% 4.57%
CIBC $101.73 -17% 5.45%
Laurentian Bank $37.98 -34% 6.97%
National Bank $56.15 -10% 4.74%
Royal Bank of Canada $93.53 -9% 4.28%
Scotiabank $67.88 -17% 5.05%
TD Canada Trust $67.86 -8% 4.03%

 

Mortgage Companies Share
Price
2018
% Change
Annual
Dividend Yield
Atrium MIC $12.52 +0.32% 7.16%
Eclipse Resi. MIC  $8.69 -14% 8.56%
Equitable Group $60.14 -16% 1.91%
Firm Capital MIC $13.11 +0.5% 7.09%
First National $27.59 -4% 7.11%
Genworth MI $40.59 -7% 5.13%
Home Capital Group $14.45 -13%
MCAN Mtg Corp $13.39 -25% 10.04%
Street Capital Group $0.56 -46%
Timbercreek Financial $8.77 -8% 7.94%
Trez Capital MIC $0.54 -86%

 


1 Discounted mortgage rates reflect the average advertised rates of Canada’s top super brokers, as of December 31.

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