Canada's 5-year yield has been on a comeback tour, giving up more than half of its downward progress since the October high. It's now surged 64 bps in six weeks, and fixed mortgage rates might finally follow suit.
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What's kicking up this dust? Inflation worries. The market crowd is losing faith in the 'next move is a rate cut' theory—or at least in the 'rate cut by summer' theory.

A savvy subset of mortgage professionals has been craftily cashing in on this strategy for some time.

For those who haven't—but seek a leg up—the following approach will paint you as a customer's trusted partner in finance, as opposed to just another transactional salesperson.

Any mortgage pro will tell you, there's no shortage of options for borrowers who can't, or don't want to, qualify for a mortgage the old-fashioned way—i.e., using traditional bank guidelines and income docs.

Catering to this paperwork-averse crowd requires a well-stocked arsenal of products and knowing all the best off-the-beaten-path lenders.

NPX is just such a lender, and it belongs in broker toolkits for one simple reason:

A sharp-minded MLN reader asked two important questions yesterday that deserve a broader response:

#1. "With U.S. consumers fueling the economy through credit—and not feeling the effects of the rate hikes due to long mortgage terms—couldn't that potentially push rate cuts out in the US and Canada?

#2. Don't we need to see a declining economy on both sides of the border for rate cuts to happen?"

Answers incoming...

If you're waiting for lower mortgage rates, here's a number to remember: 0.89.

That's the correlation between Canadian and American inflation this millennium.

At a time when U.S. GDP and payrolls are trouncing estimates, that number matters. Economic strength flows over the border—and the U.S. economy isn't just strong, at 4.2% estimated growth, it's accelerating. And it's doing so with multi-decade lows in unemployment.

In the back of Central bankers' minds, there's a growing fear that America missed its soft landing...because the economy aborted a landing altogether.

For those wondering how much longer U.S. inflation can keep falling in such an expansionary environment, you're not alone.

For those wondering whether U.S. activity could make Canadian inflation stickier than gum on a shoe—you're not alone either.

Over 300 individual private lenders are reportedly caught up in the collapse of a would-be real estate empire.

The property portfolio totals hundreds of rental units, assembled partly by internet personality and self-promoted "successful investor," Dylan Suitor. More than $144 million of leverage was used. Much of that debt is now in jeopardy.

Something doesn't feel right about this CPI fight. It's like central banks are trying to put out the inflation fire as someone pours gasoline on it.

On the one hand, Fed chief Powell said on Wednesday that rate cuts are likely sometime "this year." He celebrated America's "six months of good inflation data" and confirmed the U.S. policy rate is "likely at its peak."

On the other hand, real-time U.S. GDP estimates have suddenly surged to 4.2%, over double the rate that's historically conducive to disinflation. And that strength—as long as it holds—will also keep Canadian inflation higher than it would be, despite Tiff Macklem's attempts to downplay this threat.

Add that to Canada's hot core inflation readings and the fact that Canadian GDP has been pacing at 3%+ annualized growth over the last two months.

No doubt, more borrowers are starting to wonder if the market's June rate cut timing is ambitious.

What do mortgage shoppers do about it?

Fixed-rate funding costs have barely budged for ten days. That's visible in the 4-year swap (below), the closest thing to a fortune teller when it comes to predicting near-term uninsured fixed-rate changes.

This week's got three data thrillers that could break us out of this range, however:

ICICI Bank Canada, a wholly-owned subsidiary of India's second-largest bank, has cut the cord with mortgage brokers.

It's the comeback story of the year in Canada's mortgage market. As MLN first reported seven months ago, BMO is looking to shake up the industry after an almost 17-year absence from the broker channel.

Brokers, always in need of better prime uninsured mortgage options, have waited a long time for this. And now, that wait is over because by this time next week, the banking giant will be underwriting 3rd-party deals.

For the lowdown on BMO's broker rates, products and secret sauce, we caught up with Hassan Pirnia, Head of Home Financing and Personal Lending Products at BMO, and Justin Scully, Head of BMO BrokerEdge, the bank's new broker division.

If you're in the mortgage game and need to understand how this affects your business, you'll want to hear what they said...

The archetype of online direct-to-consumer mortgage lending has decided that brokers are an excellent way to distribute mortgages, after all.

nesto, a fintech that started as a mortgage brokerage in 2018 and then morphed into a DTC lender, has partnered with M3 Group. Beginning this March, M3's army of 8,500 brokers will have nesto mortgages in their arsenal.

Who's doing the victory dance over this alliance? Let's dive into the mutual admiration society of nesto, M3 and its brokers, and see who benefits.

What's in it for M3 brokers?

The Bank of Canada didn't just put rate hikes on the back burner today; it unplugged the stove.

The Bank is now "confident enough" that inflation is on the right track to not publicly dwell on rate hike risk any longer. That was today's message from Senior Deputy Governor Carolyn Rogers after the BoC left its overnight rate at 5%.

Instead, the Bank says it's now shifting its focus to "how long" the overnight rate needs to marinate "at the current level.”

"We need to give these higher interest rates time to do their work," Macklem said, offering no clues on how long he'll let Canada's high-rate stew simmer. The forward market thinks it'll take another four to six months. But, historically, rates have plateaued at peak levels for anywhere from a few months to 17 months. So far, it's been six months since the last hike.

The Bank says that higher rates can't be completely ruled out, but it's very rare for the Bank of Canada to hike a lot, pause 5+ months, hike more, pause 5+ months more, and then hike again.