Last year, Jason Provencher, Vice President, National Sales at Bridgewater Bank, knew that surging borrowing costs meant his bank had to react or it would lose market share.

“With the sharp rise in rates, less and less people are qualifying and there’s more stress on clients coming up for renewal,” he says. “So, we went to board and they approved us going from 30 to 35 years on maximum amortization. Shortly after that, we launched extended ratios to the market.”

The changes took effect last quarter and reinforce a trend we’ve seen among several non-prime lenders. With rates at 15-year highs, unaffordability is compelling lenders to let out more leash for qualified borrowers.

The Bank of Canada's TTFC ("time to first cut") has now been pushed out to early Q2 2023. That comes on the heels of today's ugly U.S. PCE report which showed inflation accelerating—more on that below.

There are few better indicators of inflation anxiety than 2-year yields, which have soared in the last three weeks. The U.S. 2-year rose the equivalent of half a rate hike today. It's now threatening to break November's 15-year high. Canada's 2-year rose 7 bps in sympathy even though our inflation pressures are less pressing.

The real estate start-up that pledged to buy your home at a guaranteed price if it didn't sell has shelved that offer.

The company attributes the decision to "unprecedented volatility in the Canadian housing market." And with CREA's national average home price tumbling 25% in 12 months, few will be thunderstruck by this news.

MLN reached out to Properly.ca CEO & Co-Founder Anshul Ruparell to see if there's more to the story than just falling real estate values. More on that below.

In just 19 days we've seen Canada's 5-year yield ramp-up 67 bps.

Despite that, there are still dozens of lenders with fixed rates under 5%. Mind you, they're mostly 5-year fixed insured/insurable rates—plus a few fleeting 3- and 4-year products.

Those buckling under the pressure of high interest rates got a breath of fresh air on inflation today.

January headline CPI dropped to 5.9% year-over-year, 20 bps below expectations.

That was partly a function of monetary policy working its magic and partly due to the favourable 2022 January comparable that we've been writing about. Such positive base effects will continue benefiting Canada through June.

"Many of the credit scores shared with consumers today in Canada are not the scores being used to make lending decisions," says credit analytics firm, FICO.

As a result, mortgage applicants who are declined because of a low score are often perplexed when their free score is higher.

U.S.-based FICO is hoping to address this and ramp up its Canadian visibility at the same time. The company now allows Canadian mortgage lenders and brokerages to distribute its scores to consumers. It costs nothing apart from the regular fee the provider pays to pull the credit score.

It seems that rising rates may coincide with higher market share for mortgage brokers.

New BoC staff research finds that "an increase in the bond rate represents an increase in the cost of funding, and this is correlated with an increase in broker-use."

But this report, released last week, has far more controversial findings than that.

Fixed mortgage rates threaten to rain on the spring housing parade.

They followed funding costs materially higher this week, all across the country. In one case, we saw a lender (QuestMortgage) boost its market-leading short-term rates by up to 105 bps.