mortgage rates rising

The Latest in Mortgage News: TD, CIBC Hike Mortgage Rates

TD Bank and CIBC were the first of the Big 6 banks to reverse their recent mortgage rate cuts last week.

Exactly two weeks after TD Bank cut its special-offer mortgage rates by a whopping 45 basis points, the bank reversed course and hiked its 5-year fixed rates by 30 bps. The bank also increased its 3-year fixed rate by 10 bps.

That was followed by rate hikes from CIBC, which on Friday reversed previous 5-year fixed rate reductions by hiking its insured product by 20 basis points. It also increased its 7-year fixed mortgage rate.

CIBC’s special-offer rate changes:

  • 5-year fixed (high ratio): 1.99% to 2.19%
  • 5-year fixed: 2.24% to 2.36%
  • 7-year fixed: 2.94% to 3.09%

TD’s special-offer rate changes:

  • 3-year fixed: 2.14% to 2.24%
  • 5-year fixed (high ratio): 1.89% to 2.19%
  • 5-year fixed: 1.99% to 2.29%

The big banks aren’t the only ones starting to hike mortgage rates. Other mortgage lenders such as First National and Equitable Bank have increased certain rates since last Wednesday.

And on Monday, HSBC hiked a number of its fixed rates, including its 5-year fixed (high ratio), which rose from 1.89% to 2.19%. Its 5-year fixed uninsured rate rose 30 bps to 2.29%.

The catalyst has been a rise in mortgage funding costs with last week’s sharp rise in bond yields. The 5-year Government of Canada bond yield, which typically leads 5-year fixed mortgage rates, closed at 1.07% on Friday—a 34% rise in just the past month.

2021 5yr bond yield chart

New e-signature vendor now available for mortgage deals

electronic signatures for mortgage closingsSyngrafii is now an approved e-signature vendor of integrated technology tools for brokers and lenders.

The company’s technologies are currently used by lenders, law firms and title transfer firms in Canada, and its e-signatures are biometrically secured one-time use e-signatures that “meet or exceed legal, governance and compliance standards across numerous jurisdictions worldwide,” the company said.

“We’re excited to partner with the [Canadian Lenders Association] in offering lenders our suite of integrated tools that will help simplify, expedite and improve the entire loan and mortgage life-cycle—from origination to close—for both their new and existing customers,” Matthew Gibson, Chief Executive Officer and Co-Founder, said in a prepared statement.

The company said that unlike other platforms that utilize multiple-use image and typed proxy signatures, Syngrafii is the only platform “engineered to ensure identity, compliance and non-repudiation.”

Syngrafii recently launched the capability for Remote Online Notarization (RON), which allows lawyers and notaries to affix electronic seals to documents in real-time on a video platform. The company tells CMT it’s not aware of any other competitors using signing with video in the Canadian mortgage space.

“RON—a growing trend across numerous countries and sectors in line with evolving legislation governing e-signatures—helps ensure business continuity by facilitating compliant closings for financial services, automotive leasing, law, and real estate firms, among many others,” the company said. “With remote closings now legal, lenders can deploy Syngrafii’s suite of eSignature tools for less than the cost of a courier with better compliance and time management for both the lender and customer.”

Remote closings are currently only permitted in Ontario, Saskatchewan and New Brunswick, and are in the process of adoption in B.C.

FSRA exceeding most targets, but falling short on others

The Financial Services Regulatory Authority of Ontario (FSRA) has met or exceeded 86% of its targets as of the first quarter despite a “significant increase” in applications.

The results were released in the organization’s latest service standards scorecard, which outlines its progress on priorities set out in its 2020-2023 Annual Business Plan.

For example, the regulator exceeded its targets for credit union regulatory approvals, where 100% of applications were processed within 30 days of all required information being received, above its 90% target. And 92.8% of mortgage broker complaints were dealt with within 120 days, above the 80% target.

Despite its successes in the face of the COVID-19 pandemic, FSRA still fell short on certain metrics, namely processing the licensing applications of prospective brokers.

Just 24.3% of individual mortgage broker licenses were issued within the promised 10 days, well below FSRA’s 80% target.

Similarly, just 49.5% of individual mortgage broker licenses—where a suitability issue was identified—were contacted within 10 days or had their licenses issued, again below its 80% target.

“The below-target performance is an outcome of the annual licence renewals and a significantly higher volume of new applications received,” the report said. “FSRA will increase the resource capacity and conduct completeness review of all applications. FSRA is also working with the sectors to improve the quality of applications to allow for efficient approval processes.”