Chad Moore Calgary Mortgage Broker

Hey!  I hope you’re well …

The Mortgage market is moving at the speed of light and I wanted to get a brief summary of what’s happening right now. 

**International Monetary Policy Change**

The Reserve Bank of Australia and the US Federal Reserve each dropped their central interest rate in response the Global economic slowdown from the Corona Virus.  The US dropped their rate by 50 basis points!!

**Canadian Monetary Policy Change**

The Bank of Canada is likely to make an announcement of a 25 or 50 basis point drop in our central interest rate in response the market. 

Canada’s central interest rate influences the retail banking “prime lending rate” which variable rates are synced with with. 

What’s interesting to me is how much the prime rate will drop if/when the Bank of Canada drop it’s rate. 

Back in 2015 & 2016 the rate drops by the Bank of Canada were not passed on to consumers in a 1:1 ratio.  Let’s see how everything unfolds this time around. 

**Canadian Bond Market Change**

Fixed interest rates are facing serious downward pressure.  With so much uncertainty in the stock market, investment is flooding the bond market for safety.  The result of this is down pressure on bond prices which translate into down pressure on fixed Mortgage interest rates. 

**Canadian Mortgage Qualifying Change**

There has been a change in the Mortgage qualifying stress test.  The stress test interest rate will be more dynamic and move with the Mortgage market.  This change will take effect in April.  If this new qualifying rule were in effect today, this would improve buyers affordability! 

I’m planning on extrapolating more of this information over the coming months, but for now I wanted to get this out to you ASAP. 

Any questions, let me know.

Talk soon,

Chad Moore