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Just as new rate hikes threaten to push more mortgagors over the edge, we got this ominous headline from Reuters last week:

"Canada bank regulator says lenders should urgently tackle risks from mortgage extensions"

This got worrywarts in the housing market all riled up, thinking new regulatory policies might drive borrowers into default. So, we decided to investigate what OSFI was actually proposing.

Here's what Canada's bank regulator told us:

The chart above shows how much Canada's roller coaster rate outlook has changed in just 90 days.

The purple line shows the Bank of Canada cuts that were expected this year, just after the Silicon Valley Bank drama in March.

The yellow line shows where the market now thinks the BoC is headed, give or take.

We still get cuts either way, barring an external inflationary shock. It's just that now we have to wait longer for them. On top of that, investors now believe the average implied BoC rate over the next five years will be 104 bps higher than they thought in March.

Mortgage originators all feel how tough it is out there. But the latest stats put the challenge in perspective.

"The entire mortgage originations pie has shrunk by 42%," says veteran broker Jim Tourloukis of Advent Mortgage Services, citing first-quarter Equifax data on new mortgage volumes.

And not only is the pie smaller, but brokers are getting a smaller piece. CMHC data shows broker market penetration fell from 51% in 2022 to 43% in January. "I suspect this will be lower in Q2," Tourloukis estimates. "Also, these numbers are worse for uninsurable business."

But wait, there's more. To milk the desert analogy further, not only are brokers getting a smaller piece of a smaller pie, but "the pie doesn't taste as sweet as it used to," he says.

Why?

In the last two years, we don't know any mortgage marketer who's made more progress on Google than the financial comparison site, Wowa.ca.

It's climbed the Google ranks and built a 7-figure revenue in just five years. And just last week, it set a new personal best of 36,424 visits in one day, breaking its record for paid leads.

They know what they're doing over there, and we can all take something from Wowa's success.

Here's the gist of Wednesday's newsmaking Fed decision and the relevance to Canadian mortgage rates...

What happened

After 500 bps of hikes, the Fed paused for the first time in 11 meetings.

Why it happened

Chair Jerome Powell cited two main reasons: