Mortgage Summary: RBC does not expect further cuts in BOC tax rates

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Mortgage Summary: RBC does not expect further cuts in BOC tax rates

The prospects for interest rates are becoming increasingly obvious as Canada’s major banks reconsider how far Canadian banks will go in their rate of cuts. While most people can still see space for further relaxation, RBC is taking off its backpack.

The bank has made additional cuts, predicting that the overnight rate will stabilize at 2.75% in 2026, the most hawkish among the Big Six.

“We no longer expect any tax rates to be lowered with the BOC this year,” RBC said in its latest monthly forecast update. The bank explained, “As the direct trade uncertainty facing Canada fades…the inflation outlook remains uncertain”, alleviating pressure on the central bank to take further action.

This is a shift from earlier this year when RBC is still expecting another cut before the end of the cycle.

By contrast, Scotiabank has revised its forecasts to be lower and now expects a policy rate of 2.25%, down from 2.50% from its previous batch of estimates. Meanwhile, BMO remains the most religious and will continue to decline to 2.00% by early 2026.

TD, CIBC and National Bank continue to expect to match the current inflation outlook of Bank of Canada 2.25%.

Special pricing for Canadian mortgage experts at the top US mortgage technology event

Canadian mortgage trendsWorking with mortgage professionals and National Mortgage News, it is honored to support one of the most influential mortgage technology conferences in the United States: Digital collateral.

This was held September 16-17 at the Loews Coronado Bay resort in San Diego, and it is a conference mortgage leaders are prioritizing as it is built by the people shaping the future of the industry.

New announcement Advisory Board Includes senior executives from Rocket Mortgage, Better, Loandepot, five-star banking, etc. Together, they have shaped a highly impact agenda with a focus on the most important things: AI and automation, customer experience, compliance, and the next wave of collateral technology innovations.

Mortgage professionals Canadian members are once again able to use the special pricing for this year’s event. Members of mortgage sponsors (bank and non-bank lenders) and mortgage brokers can save up to $700 through their exclusive discount codes. To receive the code, send an email [email protected] Before registration. Canadian government employees are also eligible for a discounted government interest rate pass.

*Discounts are only applicable to mortgage originators and mortgage brokers and cannot be applied to previously completed transactions. Retrospective adjustments or refunds will not be accommodated.

CMBS crimes are lowered as reward activity remains strong

Canadian CMBS crime had lower ticking in May, with Morningstar DBR reporting a default rate of 1.0% or special services interest rates, down from 1.1% in April, well below the U.S. tax rate of 7.5%.

According to Morningstar DBRS, the return on overall maturity was 100%, with no loss achieved in May. Loans at all size categories of loans and debt service coverage (DSCR) tiers are paid in full or in advance.

The number of loans that are still operating under the tolerance of the pandemic has also continued to decline. As of May, there were 19 loans with deferred balances, although most people resumed regular payments. Excellent balances associated with tolerance are now concentrated in selected property types (especially retail and hotel assets) and are primarily located in Ontario and Quebec.

Morningstar DBRS also marks that while most Impact Impact loans are performing again, there are still some who continue to show signs of stress, especially those in those regions, especially those that have been hit hard by the broader economic transition.

Overall, the report shows that the continued resilience of the Canadian CMBS market continues, with improved crime trends and strong repayment performance.

Historical crime or special service rate — ***Courtesy: DBRS Morning Star***

Ontario credit union assets have higher advantages in the fourth quarter, but mortgage growth remains slow

Credit unions in Ontario continue to expand their balance sheet in the fourth quarter of 2024, with total assets rising to C$9.61 billion, a year-on-year increase of 3.37%.

The growth was driven by $1.42 billion in commercial loans, with cash and investment up 9.44%. The growth in residential mortgages remains static, increasing by only 1.02% per year, reflecting the softening of housing activity.

Profitability improved slightly, with the average return on assets rising to 0.24%, up three basis points from the three basis points in the third quarter, due to lower interest payments to depositors.

However, credit quality shows some deterioration. The illegal rate of residential mortgage loans rose to 0.87%, up 31 basis points from the same period last year.

The FSRA noted that the broader debt situation is improving as Statscan data shows that Canada’s household debt-to-income ratio fell to 170.1% in the third quarter of 2024, down from 175.0% in the same period last year.

Despite falling rates and lower prices, many renters still insist on buying

More than a quarter of Canadian renters consider purchasing or updating their current leases before signing or updating their current leases, but ultimately choose to wait, according to a new Royal Lepage survey.

Even with reduced home prices and reduced borrowing costs, 40% of the renters surveyed said they stick with it at a lower price. Another 29% are waiting for further tax cuts, while 28% say they are still saving down payments.

Despite these obstacles, 54% of tenants said they plan to end up buying. Of these, 16% hope to do so within two years, and 21% within five years.

“The entry-level opportunity has been greatly improved,” said Royal Lepage CEO Phil Soper. “Nevertheless, many tenants… are still choosing to wait. History shows that they may be disappointed. ”

The increasing supply of dedicated rents and softer demand (subject to international student licensing) also lowers the rental price. According to Rentals.ca and Urbanization, average rents for one- and two-bedroom units fell by 3.6% and 4.6% year-on-year, respectively.

Nevertheless, affordability is still a problem. Nationwide, 37% of renters spend between 31% and 50% of their net income, while 15% of rent spend more than half. Many are also reducing groceries, savings and even doing a second job to keep up.

“Even though the decline has dropped for several months, rents are still significantly higher than they were a few years ago,” Thorpe said.

Mortgage arrears cut slightly in April

The number of mortgages in Canada had a tick-up in April, reaching 10,910 loans, accounting for 0.22% of all residential mortgages, according to the latest data from the Canadian Bankers Association.

Saskatchewan continues to report the country’s highest debt rate at 0.53%, followed by Manitoba’s 0.32%, and Canada’s Atlantic and Alberta’s 0.27%. By comparison, Quebec (0.18%), British Columbia (0.19%) and Ontario (0.20%) all remain below or close to the national average.

Despite moderate growth, by historical standards, the debt levels remain low, well below 1.52% of the current U.S. mortgage rate

Next step: Career actions in the mortgage industry

The “Next Step” is a feature in our mortgage digestion that highlights significant changes and career developments within the mortgage industry. If you have a job update, we welcome your submissions to keep the community circular.

Caroline Bacha joins Manulife Bank as National Director – Broker Channel

Caroline Bacha is an experienced banking professional who joins the National Director-Brandman Channel on the National Accounts team.

Bacha has twenty years of experience in the banking industry, bringing a good track record of broker relationship management and business development. Most recently, she worked as a BDM at First National, where she received the annual National BDM nomination for the Mortgage Excellence Award.

Bacha is known for her excellent customer service in her broker’s business acumen and her enormous communication skills. Outside of work, she is a dedicated mother and an avid traveler.

Join us to welcome Caroline Bacha to Manulife Bank as she embarks on an exciting new chapter in her career.