The House: September 30, 2024

Your bi-weekly dose of Canadian mortgage news.

September 30, 2024

Welcome to The House! Your go-to bi-weekly update on everything happening in the Canadian mortgage industry. Every second Monday, we bring you the latest industry insights, crucial updates, and more, tailored specifically for mortgage professionals. Stay up-to-date with news delivered directly to your inbox.

If you find value in our newsletter, we’d love for you to subscribe and share it with your colleagues and network!

What’s Happening:

  • Big Move on Insured Cap: The government announced major mortgage reforms aimed at making homeownership more accessible, including increasing the insured mortgage cap from $1 to $1.5 million. In addition, the eligibility for 30-year mortgage amortizations has been expanded to all first-time homebuyers and all buyers of new builds.

  • Stress Test Changes: OSFI has announced they are eliminating the mortgage stress test for uninsured mortgage switches. The change comes into effect on November 21, 2024 and applies specifically to straight switches of uninsured mortgages.

  • Rate Wars Continue: The Big 5 have been aggressively cutting rates as we see 5 year rates dip below 4% for the first time in years. As the Big 5’s fiscal year approaches on October 31, they have been slashing rates to maintain market share.

  • Canada’s Economic Rollercoaster: In July 2024, Canada's economy grew by 0.2% month-over-month, exceeding expectations, primarily driven by a robust retail sector which saw its largest increase since January 2023. This growth, however, was offset by a predicted stagnation in August, highlighting ongoing economic challenges despite positive indicators from service and goods-producing industries​.

Market Updates & Trends:

  • Prime Rate: 6.45%.

  • Housing Starts Rise, But Supply Gap Persists: In the first half of 2024, housing starts in Canada's six largest cities increased by 4% year-over-year, totaling 68,639 units. However, this growth remains insufficient to bridge the existing supply gap and meet rising demand, particularly in major markets like Toronto and Vancouver. High construction costs, regulatory delays, and elevated interest rates continue to hinder progress, with a notable decline in condominium starts as developers struggle with soft demand

  • B.C. NDP's Fast-Track Housing Plan Ahead of Election: The B.C. NDP has introduced a plan to expedite the construction of prefabricated homes, aiming to alleviate the housing crisis as the election approaches.

  • National Bank's CWB Acquisition Gains Momentum: National Bank of Canada has received initial approval from the Competition Bureau for its proposed $5 billion acquisition of Canadian Western Bank (CWB). This is the first of three necessary approvals, with the deal expected to enhance National Bank's assets by approximately C$42 billion.

  • FSRA Intensifies Oversight of Large Brokerages: The Financial Services Regulatory Authority of Ontario (FSRA) plans to increase engagement with large mortgage brokerages following reviews that revealed significant deficiencies in their supervision and compliance controls. As part of its 2024-2025 strategy, FSRA aims to ensure that brokerages adhere to regulations and maintain a strong conduct culture, with an inaugural conference planned to discuss these expectations.

  • Top Lenders Revealed by Brokers: The 2024 Brokers on Lenders report ranks the best mortgage lenders in Canada based on feedback from over 450 brokers. Leading lenders excelled in areas like responsiveness, technology use, and product innovation. The survey also highlighted rising satisfaction among brokers, emphasizing the importance of strong partnerships and communication in navigating the evolving mortgage landscape

Mortgage Rates  - Banks

  • 5-year fixed (High-Ratio) - 4.34% - CIBC

  • 4-year fixed (High-Ratio) - 4.79% - RBC, National Bank

  • 3-year fixed (High-Ratio) - 4.84% - RBC

Mortgage Rates - Digital & Monoline Lenders

  • 5-year fixed - 4.54% - Pine

  • 4-year fixed - 4.79% - Ratehub

  • 3-year fixed - 4.64% - Pine

  • 5-year fixed (High-Ratio) - 3.99% - Ratehub

  • 4-year fixed (High-Ratio) - 4.54% - Ratehub, Pine

  • 3-year fixed (High-Ratio)  - 4.24% - Pine

Compare current rates here.

Events

Who’s Hiring:

Interested in sponsoring this newsletter? Reply to this email.

Reply

or to participate.