Mortgage shoppers have even more reason to celebrate this month as fixed mortgage rates have dropped again. For the 4th time in the past month many of the big banks including RBC, TD and CIBC have dropped their 4 and 5 year fixed rates by 0.10%.

Fixed rates are heading lower as their main influence, Government bond yields, continue to dive as the benchmark 5 year bond yield is down 5.3% just today to 2.028 at 10.30am on August 24, 2008. With the spread between bond yields and fixed mortgage rates increasing, looking at historic spreads, there is room for fixed rates to fall even further.

Interestingly, RBC and TD only issued press releases saying their discounted fixed rates were heading lower while the posted 5 year fixed rates were decreased on their websites.

Could this be a shift where the big banks start to advertise more based on rate? The first signs of this was a few months back when BMO had a big marketing where they were proactively advertising their 5 year discounted 5 year fixed rate in print, TV etc. This was a change in direction for a of big bank mortgage lender to advertise on rate. Another change in strategic direction is CIBC’s now long-running campaign incentivizing home owners to ‘Switch’ to CIBC with higher air miles and cash back.

Where customer loyalty is the ultimate goal amongst the big banks pushing for a greater ‘share of customer’s wallet’, CIBC actively asking customers to switch shows a change in direction in the market and hopefully a change in Canadian consumer behaviour. Many home owners can save money by simply comparing the market and seeing what other offers are out there to access lower mortgage rates and we hope to help this trend continue.

Here are the latest fixed mortgage rate changes:

RBC fixed mortgage rates changes

TD fixed mortgage rates changes

CIBC fixed mortgage rates changes

You can compare mortgage rates here to see how these stand against brokers and credit unions.

Well some good news today for first time home buyers and home owners as fixed mortgage rates dropped again as RBC, CIBC, Scotiabank and Laurentian Bank announced the latest mortgage rate changes of -0.10% for most fixed rates. These new lower rates take effect today, August 17, 2010.

This comes on the heels of the latest CREA report that showed national home sales and house prices declined significantly last month. Seasonally adjusted home sales activity across Canada declined 6.8% from June and down 30% than July 2009.The Prairies and Quebec were level while BC (-14%) and Ontario (-8%) accounted for 85% of the change across the country.

Year to date transactions are still up 5.6% compared to the first 7 months of 2009, although it’s believed that many transactions were brought forward due to HST in BC & Ontario as well as lower mortgage rates. This gap is expected to close and eventually decline through the rest of the year. CREA’s President commented, “Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”

Average home prices in Canada in July 2010 was $330,351 (+1% year on year) edging up one% from the same month last year.
Supply has also increased based on the number of months of inventory it would take to sell houses listed on MLS based on the current sales rate, as this stands at 7 months last month which is up from 4.5 months last year.

Fixed mortgage rates are heading lower as Government of Canada bond yields have been declining recently. We’ve seen the benchmark 5 year bond yield drop by 14% in the past month and 6.6% just in August.

You can read about what our Mortgage Rate Outlook Panel of experts believe mortgage rate trends are heading.

Here’s a run down of the updated rates by bank:

RBC fixed mortgage rates changes

CIBC fixed mortgage rates changes

Scotiabank fixed mortgage rates changes

You can these bank compare mortgage rates against the rest of the market here.

RBC announced today that they’re dropping their fixed mortgage rates by 0.10%, which is effective for tomorrow August 4, 2010. This brings down their benchmark posted 5 year fixed mortgage rate to 5.59%. This rate decrease is mainly in response to the drop in the five government bond yield of almost 8% just in the past week. We expect the other major mortgage lenders to follow suit later this week.

We saw the best five year fixed mortgage rate for a quick close (ie. the deal must close within 45 days) drop to 3.89% this week as well.

Here is the full list of all the fixed rate decreases

You can check to find the lowest 5 year fixed rates in your local here.

The big Canadian banks including RBC, TD, CIBC, Scotiabank and BMO all increased their Prime lending rates as expected by 0.25% to 2.75%, effective July 21, after the Bank of Canada’s rate hike earlier in th week.

Variable mortgage rates have gone up as well, including those offered by brokers, as previously the best mortgage rate for a 5 year variable closed was 1.75% and this has now increased to 2.00% (see below).

Prime & variable mortgage rates update

* as of July 21, 2010

Lender or broker	Prime rate	Change (%)	Variable mortgage rate	Change (%)	Get details
	2.75%	+0.25%	2.00%	+0.25%
	2.75%	+0.25%	2.60%	+0.25%
	2.75%	+0.25%	2.60%	+0.25%
	2.75%	+0.25%	2.60%	+0.25%
	2.75%	+0.25%	2.35% * current special offer	0%

You can compare variable mortgage rates near you here now.

The CMHC released their latest Housing and Marketing Information report on Mortgage Lending 2009.

It provides some great information on the volumes of mortgages issued by banks and other lenders as well as the market share for CMHC approved mortgages in 2009. Here are some of the stats:

NHA and Conventional Mortgage Loans Approved by Lending Institutions, by Type of Lender

Other includes: credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas.

From this data we can see that:

NHA and Conventional Mortgage Loans Approved by Lending Institutions, by Type of Lender (Dwelling Units)

Other includes: credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas.

From this data we can see that:

Average NHA and Conventional Mortgage Loans Approved by Lending Institutions, by Type of Lender

If we then take the loan values divided by the number of units we can look at the average loan values as follows.

Residential Mortgage Credit by Lending Institutions, 1984-2009

The report also included interesting data on the volumes of mortgages issued by the different lenders.

Residential Mortgage Credit by Lending Institutions, 1984-2009, Market share

We can also look at their market share over the years:

You can see that this table shows that the Chartered Bank’s market share dropped 6% year over year in 2009. Also the chart below shows the market in 1999

Versus the market in 2009, as the Chartered Bank’s market share dropped 10%

RBC (Royal Bank of Canada) quietly lowered their fixed mortgage rates again on Friday July 2, 2010 by another 0.10%. This follows their move on June 25 to decrease their fixed rates by the same 0.10% margin. However, they did this somewhat under the radar as they didn’t issue the standard press release that usually accompanies these rate changes.

The reason that banks are now lowering their fixed mortgage rates are that their borrowing costs have plummeted in the past few weeks due to the drop in government bond yields.

The banks have been enjoying the past few weeks as their profit margins (spread) on fixed mortgages have increased as rates moved higher while their cost of funds has dropped. They are now slowly moving to drop rates again to bring the spread back in line to their ‘normal’ levels.

RBC’s variable mortgage rates remained unchanged and will do so until after the Bank of Canada’s next rate announcement on July 20.

RBC’s fixed mortgage rates are now as follows:

You can see how these new lower fixed mortgage rates compare to the rest of the mortgage market here.

The other major banks including CIBC, Scotiabank, BMO, Laurentian and Desjardins all followed RBC and TD’s lead last week and dropped most of their fixed mortgage rates by 0.10%. This comes as a result of the continuing decline of government bond yields which have been declining over the past few weeks.

Here’s a snapshot of the lower fixed mortgage rates offered by two of the banks (all rates decreased by 0.10%)

Rate term
6 month convertible	4.85%	4.95%
1 year closed	3.60%	4.40%
2 year closed	3.95%	4.25%
3 year closed	4.60%	4.80%
4 year closed	5.54%	5.64%
5 year closed	5.89%	5.89%
7 year closed	6.95%	6.90%
10 year closed	7.00%	7.25%

Lower bond yields

Fixed mortgage rates ware mainly influenced by government bond yields and we’ve seen the benchmark 5 year yield come off by 14% since the beginning of June, and is even down by 3% today to 2.35%.

Here is a chart of the 5 year bond yield over the past 3 months.

If this continues we could see fixed mortgage rates continue to drop next month as well.

RBC Royal Bank and TD again led the market today as they announced that they would be decreasing their fixed mortgage rates by 0.10%, that will take effect tomorrow June 25, 2010. There was no change to variable rates.

The fixed mortgage rate changes are as follows:

You can see how these new lower fixed mortgage rates compare to the market.

RBC Royal Bank and TD Canada Trust today lead the mortgage rate market again by announcing another decrease in fixed mortgage rates effective tomorrow May 21, 2010.

Today’s mortgage rate changes only affect the 5 year fixed closed mortgage rates and the decreases are both by 0.11%, bringing their respective 5 year fixed posted rates to 5.99%, and we expect the other banks and lenders to follow suit.

RBC & TD’s posted 5 year fixed mortgage rates are now as follows:

Posted: 5.99% (-0.11%)

Discount rate: 4.59% (-0.11%)*

* The rates indicated are special discounted rates and are not the posted rates of Royal Bank of Canada. To calculate a rate discount compare the Special Offer rate against the posted rate for the applicable term.

RBC posted 5 year fixed mortgage rates:

Posted: 5.99% (-0.11%)

Posted: 4.59% (-0.11%)*

* The rates indicated are special discounted rates and are not the posted rates of Royal Bank of Canada. To calculate a rate discount compare the Special Offer rate against the posted rate for the applicable term.

Since our last 5 year government of Canada bond yield update, which is the main influence on 5 year fixed mortgage rates, we’ve seen the following drop, which has resulted in the 5 year fixed mortgage rate lowering as well:

5 year Government of Canada bond yields:

April 21, 2010 (peak): 3.205%

May 6, 2010: 2.764% (-13.8%)
May 12, 2010: 2.975% (+7.6%)
May 19, 2010: 2.687% (-9.7%)

Yesterday’s close of 2.687% is the lowest the bond yield has been since early March 2010 before fixed mortgage rates started rising from all-time lows towards the end of March. Today’s (May 20, 2010) intra-day trading saw this yield drop to a low of 2.547%, but it since has recovered to 2.616% as of 3.15pm.

It’s a great sign that the banks are dropping mortgage rates as their costs of borrowing decrease (lower bond yields) as that’s the reason they cited increasing these same rates in the first place. We’ll see how this roller coaster continues, especially as we approach the next Bank of Canada rate announcement on June 1st, where they’ll announce whether their increasing their key lending rate which influences variable mortgage rates. So we could see more turmoil in the next week or so.

TD Canada Trust and BMO Bank of Montreal were the first big banks to drop their benchmark posted 5 year fixed mortgage rates by 0.15%, effective today May 8, 2010. This comes as the main influence on these rates, the Government of Canada 5 year bond yields have dropped over the few weeks.

Fixed mortgage rates have been yo-yoing since late March when the 5 year fixed rate jumped up by 0.60%, the biggest one day increase in over 10 years, followed by another 0.25% bump a few weeks later, as follows:

Posted 5 year fixed mortgage rate changes since March:

• March 29: 5.25%
• March 30: 5.85% (+0.60%)
• April 14: 6.10% (+0.25%)
• April 27: 6.25% (+0.15%)
• May 8: 6.10% (-0.15%)

Only the 5 year fixed rate was changed, all other mortgage rates remained the same.