Home / Market / Why homeowners and buyers can expect more mortgage rate hikes from the big banks
mortgages.jpg

Why homeowners and buyers can expect more mortgage rate hikes from the big banks

A slowing economy, and tougher mortgage rules are making it harder for Canadian banks to squeeze out profit from mortgages.

Falling government-bond yields are usually good for homeowners in Canada because mortgage rates tend to follow suit. Not this time.

Three of Canada’s biggest lenders have raised mortgage rates and more increases are expected as new regulations, a weak economy and higher costs prevent banks from capitalizing on lower borrowing rates in the debt market where they finance their mortgages.

“When you look at the funding picture, it’s getting more expensive for the banks,” Meny Grauman, a financial analyst at Cormark Securities in Toronto, said by phone Wednesday. “We’ve started to see cracks in credit and we know that’s probably going to continue to intensify. If it continues, the same logic that caused the banks to raise will continue to apply.”

Related

Check Also

0107board.jpg

Dundee Corp listened and responded with better proposal on amending its preferred shares

The people have spoken and the people, in this case holders of Series 4 preferred …

Leave a Reply

Your email address will not be published. Required fields are marked *