After a spike in bond yields last week prompted some mortgage lenders to increase certain rates, fixed mortgage rates are again trending downward.

National Bank was the latest big bank to lower its posted special rates this week, following rate drops by BMO and TD Bank last week. The rate cuts averaged 5-10 basis points (0.05% to 0.10%), although TD did drop its 3- and 5-year uninsured rates by a full 30 bps (0.30%).

Numerous other mortgage lenders have resumed their rate reductions this week, following the decline in Government of Canada bond yields, which typically lead fixed mortgage rates.

As of the close on Tuesday, the 5-yr GoC bond yield eased back to 3.46%, down from 3.60% last week.

The decline in bond yields was triggered by last week’s weak jobs report, which revealed the unemployment rate rose to 6.4%.

That’s 1.4 percentage points above where it bottomed in January 2023, noted mortgage broker and commentator Dave Larock.

“That is noteworthy because unemployment rate increases of more than 1% typically presage recessions,” he wrote in his latest blog post.

“Interestingly, while GoC bond yields have been volatile of late, they have still fluctuated within a consistent range and have continually reverted to about the level where they now stand,” he added.

For today’s mortgage shoppers, Larock continues to recommend a three-year fixed, which balances a competitive rate with a shorter time horizon to be locked in for.

“The premiums required for 1- and 2-year fixed rates remain substantial,” he notes. “While 5-year fixed-rate terms are offered at lower rates, I worry that five years may be too long to be locking in when rates are near their cycle peaks.”

National mortgage arrears rate falls

Surprisingly, Canada’s national arrears rate fell slightly in April, according to data from the Canadian Bankers Association.

The arrears rate, which tracks mortgages that are behind payments by three months or more, fell to 0.18% from 0.19% in March, where it had been for the previous three months. The latest figures work out to just 9,252 mortgages in arrears out of a total of over 5.02 million.

Despite trending upwards from a low of 0.14% in 2022, the national average arrears rate remains well below the highs seen during the pandemic, when it reached a peak of 0.27% in June 2020.

The rate of delinquencies is highest in Saskatchewan (0.56%), although that’s down for the fourth straight month from a high of 0.60% in January. Delinquency rates remain lowest in British Columbia (0.16%; +0.01%) and Ontario (0.13%; no change).

Next Steps: Mortgage industry career moves

We’re excited to launch a new feature as part of our weekly news roundups, “Next Steps,” where we’ll highlight key job changes and career advancements in the mortgage industry. Have a job change to share? We invite you to submit your updates for consideration and help us keep everyone in the loop.

HomeEquity Bank CEO assumes new role

Katherine Dudtschak has officially assumed her new role as CEO of HomeEquity Bank.

Dudtschak took over the role as of May 1, replacing former CEO Steven Ranson who announced his retirement in April after leading the bank for 25 years.

With over three decades of experience in financial services, Dudtschak brings a wealth of knowledge to HomeEquity Bank. Prior to this role, she held several senior leadership positions at RBC, demonstrating a strong commitment to customer-centric growth and innovation. Her appointment is expected to maintain the bank’s focus on providing tailored financial solutions to Canadian homeowners aged 55 and older.

“With the state of our economy and society, more Canadians than ever are ageing with debt, limited cash savings and shrinking pensions. They’re looking at the equity and savings built up in the homes they love as a path to continued independence and dignity,” Dudtschak said in a statement.

“We’ve reached the point where the over-55s are the largest demographic in Canada, and HomeEquity Bank is purely dedicated to understanding and serving the diversity of need within this vibrant and dynamic population,” she added.

Laura Shelton joins Strive as VP of Marketing

Marketing specialist Laura Shelton has joined Strive as its new Vice President of Marketing.

Most recently, she served as a senior manager at BMO BrokerEdge, where she played a pivotal role in overseeing the launch of the bank’s new broker channel.

“With almost 20 years of experience in the mortgage broker industry, I am thrilled to be joining the Strive team to continue creating ‘A Better Lending Experience,’ for both our Prime and Aspire (non-prime) mortgage borrowers,” Shelton said in a statement. “I love a fast-paced environment where everyone is working towards a common goal.”

Shelton brings with her a wealth of industry experience, having served previously as Director of Marketing and Communications at Mortgage Professionals Canada and as Director of Marketing at Street Capital Bank of Canada.

Consumer confidence drops to 4-week low

Consumer confidence fell this week, led by weakening views on the economy and real estate, according to a weekly survey by Bloomberg and Nanos.

The Expectations Sub-indice, which projects into the future, reached 52.82, down from a recent high of 54.04 early last month. For context, the average for 2024 is 52.42, slightly above the worst year on record, which was 2008 at 49.21.

“Canadian consumer confidence continues to trend in marginally positive territory,” said Nanos, Chief Data Scientist. “Of note there has been some downward pressure on perceptions related to the future value of real estate and the future strength of the Canadian economy in terms of the numeric values.”

Looking at specific measures of consumer confidence, sentiment on the Canadian economy deteriorated to 18.48 from 19.07 last week, while sentiment towards real estate fell to 46.42 from 47.77 last week and 49.09 four weeks ago.

big banks canadian bankers association cba consumer confidence Editor's pick fixed mortgage rates fixed mortgage rates falling HomeEquity Bank interest rates Katherine Dudtschak Laura Shelton mortgage arrears nanos consumer confidence nik nanos Strive Capital

Last modified: July 12, 2024