MLN NewsStream

“A record 95% of new mortgages in June 2023 were fixed-rate,” reported National Bank Financial’s Daren King on Tuesday.

This all-time low for variable market share sharply contrasts with the months preceding prime rate's uphill journey. Back then—just 18-24 months ago—up to 57% of mortgagors took their chances with a variable.

Contrary to NBF’s report, however, the fact that borrowers are giving the cold shoulder to variables isn’t overly surprising.

There are at least six reasons why today's mortgage shoppers don’t want to float:

Some lenders have an unconventional idea of partnership. They boldly label brokers as their "partners" but treat them with the same respect one might reserve for a telemarketer who calls during dinner.

If you're a lender, one strange way to show broker partners you 'care' is to withhold your best rates from them, giving the lowest pricing only to your retail reps. It's almost like telling brokers, "You're expendable. Deal with it."

Eighteen months into one of the most vigorous hiking cycles in history, 90-day #prime mortgage# arrears are still dragging along the historical bottom at just 15 bps. A year ago, virtually every analyst in the game thought they'd be higher by now.

But the fact that 90-day arrears are less than half the 36 bps long-term average is no longer a mystery. Low unemployment, strong equity positions, government intervention, supportive banks, accumulated savings, strong underwriting and other factors are keeping Canadians in their homes and jingle-mail at bay.

The world's most influential bond, America's 10-year Treasury, is making a brisk run for its 4.34% October high (chart above). That's raising the stakes for beleaguered borrowers on both sides of the border.

This latest yield sprint comes on the heels of: