Skip to main content

CIBC lowers mortgage costs

Two days after the Bank of Canada raised short-term interest costs, the Canadian Imperial Bank of Commerce (TSX: CM) said Friday it is trimming its posted mortgage rates.
Among the changes, CIBC's one-year closed rate slips to 6.25 per cent from 6.30 per cent, while the three-, five- and 10-year rates each decline by one-fifth of a percentage point, to 6.45 per cent, 6.75 per cent and 7.55 per cent.
The bank's move followed Wednesday's quarter-point increase in the prime lending rate to six per cent at all the major commercial banks, after the Bank of Canada raised its overnight rate to 4.25 per cent from four per cent.
While it increased the cost of short-term money for the seventh time since last autumn, the central bank also signalled that its series of hikes is likely over.
On bond markets, where banks fund their mortgage obligations, the Canadian yield curve flattened this week, as would be expected after the central bank's increase at the short end.
'Interestingly, though, the flattening came through entirely in the long end, where yields declined four basis points,' a commentary from the Bank of Nova Scotia (TSX: BNS) observed.
'For both the Canadian and U.S. curves, yields between the target policy rate all the way to the long end are now nearly flat.'"

Comments

Popular posts from this blog

Where to invest in real estate now

"Want to buy a house in Vancouver? Hope you have lots of cash. The average price of a house in Lotus Land hit $490,004 in February. Think about it for a second. That's nearly half a million dollars--and 26.5% higher than a year ago. Put another way, it now takes a household income of $142,000 a year to comfortably purchase a place to live. Wasn't the real estate market supposed to slow down this year? Apparently not. And it's not just Vancouver that's experiencing double-digit price increases so far this year. Canadian Real Estate Association (CREA) figures show the average home price from February 2005 to February 2006 rose 26% in Calgary and 15.5% in Edmonton, both economic boomtowns of late. But even relatively moribund Toronto saw an increase of nearly 6%, for an average price of almost $354,000. That's a lot of money to put on the line if you're thinking of investing in the real estate market--let alone looking for a place to live. No wonder people are...

Canada's recession resilience (article below)

There will be lots of information coming out today. Bank of Canada governor Mark Carney will be explaining (maybe vaguely) the reasons for the BoC rate drop and expectations we should have for the future, quantitative easing (printing money), and how this will all affect the Canadian economy. Here is an article from the Financial Post that expands on this. Keep an eye on this as it will affect bond rates/yields which could affect mortgage rates. Terence Corcoran: Quantitative schemes at the Bank of Canada Posted: April 22, 2009, 9:17 PM by Ron Nurwisah Terence Corcoran , central banks On Thursday we will learn what the Bank of Canada will do next to stimulate the economy, how it will apply the now famous “quantitative easing” phase of its ongoing effort.The bank is already giving away money, setting an overnight rate of 0.25% — “virtually zero,” as former governor John Crow says in his commentary . At the chartered banks, astute mortgage borrowers can almost lock in less than 2% for...