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TD matches RBC’s five-year fixed

It’s a rate war in reverse, with TD following RBC’s decision to set a five-year fixed well above the broker’s best.

Earlier this week, TD brought the rates on both its three- and five-year fixed mortgages in line with RBC, introducing a special on its own five-year equal to RBC’s 3.69 per cent.

The country’s biggest bank made its move on Tuesday, announcing that it has bumped up its five-year-fixed by 20 bps. The decision has been viewed by some industry players as a win for brokers and mono-lines.

“Brokers could use these rate hikes to their advantage for the next two weeks or at least until other lenders decide to raise their rates also,” said Kunal Bhalia, broker with Dominion Lending Centres – Mortgage Village.

Still, none of the other Big Six members appear to have followed suit.

A quick check of the bank’s websites today indicates that CIBC, BMO and National Bank are offering their three-year-fixed at 3.95 per cent and five-year-fixed is 5.24 per cent. However, BMO also offers five-year fixed at a low rate of 3.29 per cent.

Scotia’s three-year-fixed mortgage is 3.99 per cent and its five-year-fixed is 4.99 per cent. The bank has a special offer of 3.99 per cent on its five-year closed-term fixed mortgage.

There are a number of mortgage rates lower than what banks have posted, suggesting brokers increasingly face a hidden rate war – one without the kind of bank advertised rates that encourage fence-sitters into the market. Source: Brokernews

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No sharp dive in housing market says CIBC economist

According to a top CIBC economist, suggesting the anticipated housing decline will not be as sharp or as long as earlier projected because of immigration.

“It turns out fears of a long and sharp downturn in the housing market, are highly exaggerated and very premature,” said Benjamin Tal, deputy chief economist at CIBC. “In fact demographic forces will be supportive to real estate markets in the coming decade.”

Tal predicts immigration, which is responsible for most of the population growth, will be a major force impacting housing demand.

“What’s more, there is significant jump in the home ownership rate among immigrants as they pass the three-year mark,” said Tal. “In fact, after 10 years in Canada, the propensity among immigrants to own a house is higher than among native Canadians.”

While there will be a decline in the number of Canadians under the age of 25 and those between 45 and 54, those age groups account for a relatively small portion of home buyers, Tal writes in his latest Consumer Watch report.

By contrast, the number of Canadians between the ages of 25 and 35 – the age group that makes up the vast majority of first-time home buyers – will continue to rise, the report said.

“From a housing market perspective, what counts is not only the change in population of a given age group, but more importantly, the level of housing market activity among these groups,” said Tal. “In other words, the group that is most likely to buy a house will grow faster in the coming decade.” Source: Brokernews.ca

 
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