Real Estate

Some Mortgage Rates rising Sunday at midnight

  • Last Updated:
  • Feb 23rd, 2021 7:24 pm
[OP]
Jr. Member
User avatar
Aug 14, 2020
150 posts
134 upvotes
Hamilton, ON

Some Mortgage Rates rising Sunday at midnight

This post will get dated fast. Feb 20th, 2021 at 9:24 AM.

I have received emails from 2 monolines to let us know that rates are scheduled to rise shortly on some of their products on purchases, and more may follow.

If you have just bought and are in a position to get your broker/agent to submit your application in the next 36 hours or so, it might possibly save you about 0.15%.
This doesn't necessarily apply to every product with every lender. I also am not suggesting that you throw caution to the wind in your house bidding and spend thousands more to save a few dollars a month on mortgages. It's just a heads up if you have a choice of submitting today or Sunday vs. Monday.
_



Getting a mortgage is like writing a test...except you're allowed to work with someone who knows the answers!

Kirby Reschny
Mortgage Agent
Real Mortgage Associates (FSRA #10464)
69 replies
Deal Addict
User avatar
Mar 30, 2010
2954 posts
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Kagaaruk, NU
Well that was quick. Is it normal for lenders to increase rates without waiting for BoC?

Either way thanks for the heads up!
[OP]
Jr. Member
User avatar
Aug 14, 2020
150 posts
134 upvotes
Hamilton, ON
They adjust them all the time in relation to bond rates - think of it as small adjustments to react to competitive pressures. They've been nudging down for a while now with no change in the BoC. This was meant as a minor heads up to people who are in position to act reasonably, not a big red alert. I'm trying to raise awareness without an overreaction.
_



Getting a mortgage is like writing a test...except you're allowed to work with someone who knows the answers!

Kirby Reschny
Mortgage Agent
Real Mortgage Associates (FSRA #10464)
Member
Sep 13, 2007
476 posts
105 upvotes
Toronto
thanks OP

Is this a sign this is a long-term upward trend?
If i'm in variable, should i consider locking into a fixed rate?
Newbie
Mar 22, 2007
43 posts
10 upvotes
Westmount
Bond have been steadily increasing for the past week. 5 year bond yield increased by about 0.15% since Tuesday. More if you count closing Friday the previous week. 10 and 30 year bonds have actually increased YOY signalling a steeper yield curve. I could imagine 5 year fixed could be heading up while variable rates probably see a smaller discount over prime.

Keep in mind this optimism seems to be tied to the better than expected consumer spending in the US, higher than expected inflation in Canada, and higher oil prices due to the Texas freeze. Also the reopening in many provinces.
Deal Guru
Feb 29, 2008
13823 posts
10035 upvotes
Lenders want people to lock into fixed rates.
Deal Addict
Jul 3, 2007
3087 posts
3310 upvotes
Toronto
bond market controls fixed rates....

Inflation is about to hit , big time.... gas is already 1.20 for regular and climbing..... food bills are next

Deal Guru
Feb 29, 2008
13823 posts
10035 upvotes
joepipe wrote: Inflation is about to hit , big time.... gas is already 1.20 for regular and climbing.....

I was told inflation is 1% lulz
Deal Addict
Jul 3, 2007
3087 posts
3310 upvotes
Toronto
JayLove06 wrote: I was told inflation is 1% lulz
Canada CPI and inflation stats are a complete joke.... its dangerous how much they leave out
Newbie
Mar 22, 2007
43 posts
10 upvotes
Westmount
It’s funny but the CPI is at 1% primarily due to lower energy cost (due to government intervention, removing peak energy cost), air travel, and strangely footwear and sporting goods. Major contributor of inflation is gasoline. I can imagine inflation increasing when air travel picks up and when summer hits. But I can also see some downward pressures when gas production ramps up.

As an aside, I posted this up on a Reddit forum but no one seemed to have an answer. But, the February CPI will start to include resale data in their mortgage interest cost index(MICI). Prior to this it only contained new house price indexes. If anyone knows how this might affect the February 2021 CPI let me know! It would be interesting to see if it would cause a spike in CPI due to the YOY increases in resale housing.
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
Pork up 16% in 4 days

RIP pepperoni pizza
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
Well I mentioned for weeks rates would be going up so I’m not surprised at all.

Central bankers are going to be stuck. Bond markets are going to punish the bankers for all their printing.
Deal Guru
Feb 29, 2008
13823 posts
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Sanyo wrote: Pork up 16% in 4 days

RIP pepperoni pizza
Prices up everywhere. Had a quote of $3500 to move from Toronto to Richmond hill.
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
JayLove06 wrote: Prices up everywhere. Had a quote of $3500 to move from Toronto to Richmond hill.
Jeez... rates need to go up faster maybe then any of us thought then...
Deal Addict
Jul 3, 2007
3087 posts
3310 upvotes
Toronto
mikebob wrote: It’s funny but the CPI is at 1% primarily due to lower energy cost (due to government intervention, removing peak energy cost), air travel, and strangely footwear and sporting goods. Major contributor of inflation is gasoline. I can imagine inflation increasing when air travel picks up and when summer hits. But I can also see some downward pressures when gas production ramps up.

As an aside, I posted this up on a Reddit forum but no one seemed to have an answer. But, the February CPI will start to include resale data in their mortgage interest cost index(MICI). Prior to this it only contained new house price indexes. If anyone knows how this might affect the February 2021 CPI let me know! It would be interesting to see if it would cause a spike in CPI due to the YOY increases in resale housing.
its mind boggling that they dont include resale housing prices in CPI , the most expensive cost of all...
Deal Guru
Feb 29, 2008
13823 posts
10035 upvotes
Sanyo wrote: Jeez... rates need to go up faster maybe then any of us thought then...
I told them the price is ridiculous and they told me that’s the rate. That COVID premium is here to stay
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
joepipe wrote: its mind boggling that they dont include resale housing prices in CPI , the most expensive cost of all...
Cause without real estate what does Canada have? Trudeau for the last 6 years has poured gasoline to the fire with all his spending and this covid is what is finally going to make it explode
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
JayLove06 wrote: I told them the price is ridiculous and they told me that’s the rate. That COVID premium is here to stay
For now... it all goes in cycles
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
mikebob wrote: Bond have been steadily increasing for the past week. 5 year bond yield increased by about 0.15% since Tuesday. More if you count closing Friday the previous week. 10 and 30 year bonds have actually increased YOY signalling a steeper yield curve. I could imagine 5 year fixed could be heading up while variable rates probably see a smaller discount over prime.

Keep in mind this optimism seems to be tied to the better than expected consumer spending in the US, higher than expected inflation in Canada, and higher oil prices due to the Texas freeze. Also the reopening in many provinces.
Yields have been spiking since the beginning of the year and trending up since September...
Deal Guru
Feb 9, 2009
10620 posts
8960 upvotes
noobienoob wrote: thanks OP

Is this a sign this is a long-term upward trend?
If i'm in variable, should i consider locking into a fixed rate?
This could very well be the end of our multi decade bull market in the bond market that started in the 80s and yields could start trending back up.

We printed an insane amount of money this year...

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