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.
Last modified: December 31, 2018
