RBC first to cut mortgage rate

Last week when the Bank of Canada announced their surprise rate cut none of the big banks seemed to be in a rush to announce lower lending rates on mortgages.

We asked which will be the first lender to lower mortgage rates and now we have the answer:

RBC is the first to cut mortgage rates as bond yields plunge.

Royal Bank, the country’s second-biggest lender by assets, offered a five-year fixed rate of 2.84 per cent on Jan. 24, down from 2.94 per cent last week, according to rate-tracking website Ratespy.com. That’s below RBC’s posted rate of 4.84 per cent. The bank also trimmed its three-, seven-, and 10-year rates, according to CanadianMortgageTrends.com, an industry news website.

Race to the bottom or just a good time to renew?

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Shut It Down Already
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Shut It Down Already

Did the posted rate change too, or just their discounted rate?

Mortgageslave
Member
Mortgageslave

Best thing about richmond is the turnabout after the knight st bridge that heads east! You can’t even get Flood/Earthquake insurance on a home in that city. Great “risk free” Investment. Enough said.

Mortgageslave
Member
Mortgageslave

They did not change their Prime rate so debtors will still be paying the same amount.

DaMann
Member
DaMann
5 year 2.84%!!! I really can’t believe people argue with me when I tell them Vancouver ISN’T different. It’s cheap money fueling the fire. I had a mild argument with friends about RE in Vancouver “will never drop” “it’s a good investment” My argument is, and always has been, the graph of housing value increase correlates pretty damn well with dropping interest rates and CMHC going to longer amortizations and smaller down payments. They don’t have much of a rebuttal when I point out that places like Regina and others have gone up just as much in % terms during the same time period. Their argument , which I have to admit is a hard one to answer, is when will rates rise? They are all of the same ilk that it’s a new world order and cheap money is… Read more »
southseacompany
Member
southseacompany

Canada, a magical world where someone can always bring more booze to the party;

“Bank of Canada will cut interest rate again, TD Bank predicts”
“TD forecasts oil below $40 a barrel, higher unemployment and another interest rate cut in March”

http://www.cbc.ca/news/business/bank-of-canada-will-cut-interest-rate-again-td-bank-predicts-1.2931859

“The Bank of Canada will cut its key interest rate again in March, TD Bank predicts in an update to its 2015 forecast.”

“In an update released Monday, TD forecast that the downward trend will lead the Bank of Canada to cut the overnight rate by another 25 basis points to .5 per cent, before standing pat until the second half of 2016”

southseacompany
Member
southseacompany

Another prediction that more cuts coming;

“Traders signal deeper cuts after Bank of Canada’s interest rate shocker” with Video.

http://www.bnn.ca/News/2015/1/26/Traders-signal-deeper-cuts-after-Bank-of-Canada-rate-shocker.aspx

“Bond traders reeling from the Bank of Canada’s shock interest-rate cut are betting Governor Stephen Poloz will do it again.”

“A cut of 25 basis points “ain’t going to do that much for the economy,” David Madani, an economist at Capital Economics in Toronto, said by phone Jan. 23. “Clearly, the bank is spooked by the collapse in oil prices. If it really is concerned, there’s a really strong likelihood they’ll cut rates further.””

“Madani, the only forecaster in a Bloomberg survey conducted from Jan. 9 to Jan. 14 who said lower rates were in store, said the gap in the actual price of oil and the bank’s assumptions leaves the door wide open for another rate cut. He’s estimating it will come in April.”

southseacompany
Member
southseacompany

@#4 Apologeez to DaMann. I’m just the messenger.

Mortgageslave
Member
Mortgageslave

@chinoria
“I tried to post about the $1.7 Billion Money Launderer on Garth’s blog, but he wouldn’t let it through”

Most likely because your full of shit! Of course you have no proof. As I previously mentioned, It is next to impossible to launder anymore in North America, unless you want to risk getting a $10 Billion fine from the US Regulators….Hmmm risk vs reward. Different times now people, I know this for a fact! The whole global banking system is fighting organized crime, it’s the only way to stop it.

Softy
Guest
Softy

“They are all of the same ilk that it’s a new world order and cheap money is here to stay. I find that notion preposterous,”

Cheap money doesn’t have to be here to stay. Another 15 years will do just fine.

CPG
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CPG

“So what does Alberta have to show for some 24 billion barrels of conventional crude and bitumen that have so far come out of the ground? The province is currently over $12 billion in debt and is projected to run a budget deficit of $500 million this year, the seventh consecutive year in the red for a province that prides itself on having a sharp fiscal pencil.”

Alberta’s Crazy Oil Bender Is Over

Now stuck with a crude hangover, it could’ve been like wise and sober Norway.

http://thetyee.ca/Opinion/2015/01/19/Alberta-Oil-Bender/

space889
Guest
space889

@DaMann – There are more debtors than savers and governments are net debtors, so no, savers will not be rewarded. Not only that, but if you read most economic analysts, savers are almost universally portrayed to villians because they don’t spend and boost the damn GDP! The current policy and mantra are about spending, spending, spending. Saving is simply evil to most mainstream economist.

So yes, you along with all the other savers will be screwed for years to come for the benefit of the debtors.

It’s really too bad cuz investments which builds actual wealth come from savings, but that little points seem to have been forgetten.

paulb
Member

New Listings 274
Price Changes 57
Sold Listings 131
TI:11519

http://www.paulboenisch.com

@4 Da Mann
Guest
@4 Da Mann
So DaMann. what would you say to your friends if they responded that like-for-like houses have gone up about $700,000 MORE in Vancouver IN ACTUAL DOLLAR terms than in Regina even though the % increase are the same? How would you explain (in terms of cheap credit) that if cheap credit lending circumstances are broadly consistent across Canada – how come equivalent Vancouver Houses have increased $700,000 more (or even $400,000 more) if its all about cheap credit – considering that Regina workers have a MUCH LARGER median income than Vancouver workers – and therefore by your argument, their considerably greater salaries should enable them to borrow much more than us on cheap credit? Why is our cheap credit bubble – on much lower salaries – so much more profound than Regina’s – in actual dollar terms? What would you… Read more »
@PaulB
Guest
@PaulB

Hi Paul. Great Stats.

Since the interest rate cut, do you notice more activity in your office (ie. increase in pending sales) or is it business as usual?

patriotz
Member

@13: “Why is our cheap credit bubble – on much lower salaries – so much more profound than Regina’s – in actual dollar terms? ”

Because people in Regina have never been willing to spend the same multiple of their incomes to buy a house as people in Vancouver.

Might have something to do with them not believing that everyone wants to live there, they are running out of land, or rich Chinese are lined up to buy their houses. Or in simple terms they are not as crazy.

You might also note that the ratio between prices in San Francisco or LA, and US prairie cities like Omaha or Lincoln, Nebraska got even bigger during the US bubble. People in the US West Coast thought it was because they were “special” too. Until the bust.

@CPG
Guest
@CPG

They private sector privatized the profits. Stole from public in plain view.

bobwestsiderealtor
Guest
bobwestsiderealtor

Only an idealogical recent buyer whom negotiated a fixed rate would be surprised that the banks, who are in competition with one another, would ultimately compete with one another on rates.

southseacompany
Member
southseacompany

@#15 Having a local press monopoly that reprints industry press releases as news helps with the self-fulling prophesies;

“Barbara Yaffe: Property developers bullish on Metro Vancouver real estate market”

http://www.vancouversun.com/business/Barbara+Yaffe+Property+developers+bullish+Metro+Vancouver+real+estate+market/10761937/story.html#ixzz3PzEOWVoA

No need to read, here’s the usual quotes;

“Vancouver is going to do well, everyone wants to be here,”

“We’re very positive on Vancouver, and it’s going to continue for some time.”

“We’re picturesque, have a healthy environment, we’re a clean, safe city offering excellent health care and educational opportunities. We are politically stable and close to Asia.”

bobwestsiderealtor
Guest
bobwestsiderealtor

@3 They did not change their Prime rate so debtors will still be paying the same amount.

My cap rate is 5% and my mortgage rate is 2.5%. Bring on the debt!

bobwestsiderealtor
Guest
bobwestsiderealtor

@15 patriotz Says:
January 26th, 2015 at 5:36 pm 15
@13: “Why is our cheap credit bubble – on much lower salaries – so much more profound than Regina’s – in actual dollar terms?”

“Because people in Regina have never been willing to spend the same multiple of their incomes to buy a house as people in Vancouver.”

Could it be that detached houses in Vancouver are valued as multi-family?:

https://twitter.com/YVRHousing/status/559519053862023168

joe
Guest
joe

Those dividends are looking better than ever…..who needs a real estate agent and a bunch of debt?

@15 Patriotz
Guest
@15 Patriotz
@15 Patriotz. Yes, cheap credit is a major factor in the Canadian housing market – nobody is disputing that. However, cheap credit is cheap credit Canada wide – and the lending rules DO NOT change because its Vancouver. As usual, you offer lots of bluster and lots of points-of-order to cloud issues but again, as usual, you offer very little evidence to support your assertions. In Ottawa Pats Vancouver world: Mr and Mrs Vancouver walk into the bank office. “Excuse me Bank Manger id like to borrow $1 million to put towards that $1.3 million Van Detached.” Bank manager: “Sorry. Your (albeit above average) incomes indicate that you can only borrow up to $577,000.” Mr & Mrs Vancouver. “Yes but this is Vancouver and we’re running out of land..and we like to borrow more, and we have investors.. and we… Read more »
Mortgageslave
Member
Mortgageslave

@22 – go away junior realtor!

Mortgageslave
Member
Mortgageslave

Bobwestsiderealtor, did you see what the rate cut did to the equity markets? Holy shit i made some money, bring on the cash! People that dont own houses have $$$ to invest, got it space889? Drop the lending rate another .5 for all i care, i’ll make another 10%. Oh, 12%, once i convert it back to CAD. Btw everybody, ii heard from a realtor that its a great time to buy a house,

southseacompany
Member
southseacompany

“Home Prices To Fall In 8 Provinces Amid ‘Sharp Widening’ Of Canada’s Economic Gap: TD Bank”, Huffington Post

http://www.huffingtonpost.ca/2015/01/26/house-prices-canada-toronto-alberta_n_6547972.html

“TD Bank sees house prices coming down in all but Canada’s two hottest markets this year, with falling oil prices taking an especially large bite out of the housing markets in energy producing regions.”

“Only Ontario and British Columbia — propelled by the seemingly perennially hot housing markets in Toronto and Vancouver — will avoid falling prices and sales in 2015, the bank forecast. The bank sees house prices rising 3.1 per cent in Ontario this year, and 2.9 per cent in B.C.”

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