Ever since mortgage rates leapfrogged into the 6s in 2023, refinance demand has been building. Much of that demand was never satisfied because borrowing costs were too high or qualifications were too tough.

Now, as if by financial magic, conditions are changing. Thanks to anticipated BoC cuts—count 'em, 75 bps worth by year-end—plus cooler inflation and a bump in unemployment rates, yields are discovering gravity. In fact, our go-to fixed-rate gauge, the 4-year swap, has already dipped a cool 169 bps from its peak.

“This is very reminiscent, so far, of 1987”
—Ed Yardeni (via Bloomberg)

Recession jitters, market turmoil in Japan and liquidity concerns slammed bond yields this morning. Despite a hefty intraday turnaround, the sentiment damage is done. Now markets wait for the next shoe to drop.

It's possible yields catch a bounce off this doji formation on the U.S. 5-year yield chart below. If not, brace for a market fireworks.

In the week ended August 2, the U.S. 10-year yield plunged 41 bps. That's a 9.8% drop in percentage terms, as measured against the yield the week before.

How often does the 10-year Treasury yield belly flop 9.8%+ and 41 bps in a single week?

How about only three other times since 1962?!

This statistic should have eyebrows hitting hairlines. In MLN's latest Mortgage Minute, we break down why this seismic shift matters for Canadian mortgagors.
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What we're staring at above is Canada's 5-year yield, which cascaded 72 bps in just 29 days. It's the first time we've closed under 3% since May 2023.

Yield drops like this are as common as a one-handed economist, and multiple factors are fueling the tailspin:

Effective today, 30-year amortizations are back for high-ratio borrowers. It's their first sighting since going extinct in 2012.

Given that 30-year insured ams. are exclusive to newbie buyers purchasing freshly-built homes, many mortgage originators are wondering, "How can I effectively promote this program?"

Below are eight tactics to help do just that—and fire up your insured purchase business:

The purpose of higher policy interest rates is to lower inflation. But when the Bank of Canada hikes rates, it also pumps up the single biggest driver of inflation: mortgage interest costs.

Essentially, the Bank is keeping inflation 'inflated' because of its very own actions. If Alanis Morissette wrote a song about this, it would probably be called 'Ironic.'

Unlike most of its global peers, the Bank of Canada lets mortgage interest costs directly influence the consumer price index it targets. And those costs just rose at their fastest clip ever in the latest hiking cycle.