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2180 Steeles Avenue West,
Suite 204, Concord,
ON, L4K 2Z5

Phone:     905-761-7001
Toll Free: 1855-761-7001
Fax:          905-761-7005

Email: mortgageadvisor@rogers.com




24 March 2020

New mortgage rates are growing, in spite of the recent overnight rate drop by the central bank

As the central bank cut its key lending rate by 1% in March because of the COVID-19 pandemic, it may seem that you should wait and get a better mortgage rate later. However, mortgage specialists say it’s not true.

The deal is that advertised interest rates for new mortgages are growing sharply. The raises started last Friday – the day the Bank of Canada made its emergency rate cut – with Scotiabank, TD, RBC. In addition to it, they are also cutting discounts on a prime rate for variable mortgages. Today, the prime rate is 2.95%, and it means the discounts on almost all variable rates are tiny. Later, we may see none of them at all.

As a rule, fixed rates depend directly on the bond market. However, as banks need liquidity these days, they are raising the rates. There’s been a decline at the bond market, following the BoC’s rate cut, but it has already recovered since then.

Today, banks liquidity is the main issue for the federal government, which introduced new changes recently aimed at stabilizing funding and liquidity to financial institutions and supporting lending to Canadian businesses and consumers.

Earlier, the Ministry of Finance said it was starting a $50 billion Insured Mortgage Purchase Program (IMPP), which helps mortgage lenders to transfer previously uninsured mortgages into National Housing Act Mortgage-Backed Securities for CMHC to buy these securities with the help of IMPP. This measure will provide financial institutions with more liquidity, so they will be able to keep on lending to businesses and individuals, while helping clients who are dealing with financial difficulties.

This way the government takes on the risk associated with previously uninsured mortgages, providing banks with more liquidity. The measure is aimed at supporting banks while they are offering mortgage payments deferrals to clients dealing with financial problems caused by the COVID-19 pandemic.

Although the rates for new mortgages are growing, people still hurry to get a mortgage amid the news about rate cuts from the BoC.

Meanwhile, we also receive numerous calls from customers in need of mortgage deferral programs. You can find lots of useful information about mortgage payments relief options from different lenders by clicking on "COVID-19" banner or here.

 

 

 

 

 

 

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News

31 March 2020

Canadian mortgage rates are going up in spite of the BoC’s recent reductions Mortgage rates are growing even despite the recent rate cuts from the ce...Read more >>

30 March 2020

Banks and mortgage lenders cut prime lending rates yet again Canadian biggest banks and mortgage lenders cut their prime rate to 2.45% from 2.95% in ...Read more >>

27 March 2020

Bank of Canada cuts its key lending rate once again On Friday morning, the Bank of Canada made one more unscheduled cut to its overnight rate by half...Read more >>
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