Credit unions are an afterthought for many Canadians. Yet, CUs are critical to the mortgage ecosystem because they compete in ways that banks don't.

In the once stable world of mortgage market share, the Big 6 banks have slipped on a banana peel. Their market share of new mortgage originations sank 590 bps to 53.8% in Q1 2023, according to new CMHC data. That starkly contrasts with their previous 62.0%, from just two years back.

Policymakers have waged a two-pronged attack on fixed-payment variable-rate mortgages.

Last week, the BoC's Senior Deputy Governor Carolyn Rodgers came out swinging, telling Bloomberg:

“I think you’ll see the industry reflect on how much they want to offer that product. It is concerning. You don’t want a big portfolio of negative amortizing mortgages. It’s not good for the banks and it’s not good for the mortgage holders."

In what seemed to be a coordinated attack, OSFI head Peter Routledge piled on last week, labelling static-payment variables "dangerous" in senate committee testimony. His stated reason: in cases where interest exceeds the borrower's payment, and their balance grows, this "increases the risk of default."

Are we getting the whole picture?

Pine trees can be prickly. How appropriate because that's exactly what kind of competitor Pine Canada Financial Corporation ("Pine") is becoming.

You'll notice in the rate table below, Pine has decided to emerge from the forest undergrowth and overtake every national lender in uninsured 1- to 5-year fixed pricing.

That's an interesting development from a tiny online lender whose staying power some questioned. Heck, when we first reviewed the company 15 months ago, we wondered if its $27+ million in VC funding amounted to bonfire kindling.

It turns out prickly little Pine isn't such an easy-to-dismiss competitor. It just accomplished one of the most difficult of tasks in the Canadian mortgage industry:

With cutthroat mortgage competition, plummeting insured volumes and margins so thin they'd starve a supermodel, it's been way more challenging to make money in insured lending.

That and non-stop regulatory tightening have inspired mortgage finance companies to jump headfirst into the alternative lending pool.

Strive is no exception. It's been piloting its new "Aspire" non-prime products since summer. Now, the company has hired a sales director for alternative lending, is adding new funding partners and is opening up the product to more brokers in Alberta, B.C. and Ontario.

As traditional prime lenders turn down more borrowers due to credit and qualification constraints, "the Alt-A credit profiles we're seeing are strong," says Steve Kissuk, Chief Credit Officer and Co-Founder at Strive.

It's hard to take a firm position on which mortgage term is optimal for most people at any given time. But on Friday, we did just that by awarding the "MVT" (most valuable term) to floating-rate mortgages.

Now, we take such declarations seriously and didn't just pull this call out of fortune cookie. Multiple factors went into MLN's analysis, including:

Just when you thought jobs data Fridays couldn't get more exciting, the economic deities serve up two reports tailor-made for low-rate aficionados.

Today's softer-than-expected employment data is keeping North American bond yields in a nosedive. And given the market's positive reaction to U.S. Treasury supply projections, it looks increasingly likely that the ceiling for yields is in.

With economic deterioration mounting and bond bulls stampeding away from 5% yields, Bruce Buffer would probably tell you, "It's time!" to bet on variables.

Most Canadians don't pencil in U.S. Federal Reserve meetings on their calendars. But if they want to understand what's influencing their mortgage costs, they might consider it for 2024.

At Wednesday's meeting, #FOMC# members voted unanimously to keep America's top policy rate at 5.50%.

That should matter to mortgagors, given Canada's prime rate and the Fed funds rate are as synced up as Celine Dion's backup singers – a 0.93 correlation, to be precise.

Similarly, U.S. yields are like the North Star to Canadian yields, and that turned out to be a good thing on Wednesday.

Some of the payment increases borrowers are seeing on renewal are a Nightmare on Mortgage Street—especially for folks without offsetting income gains.

But some of these predictions of renewal payment shock are getting a little dramatic.

The latest report to spawn worrisome headlines comes from RBC, who warns us to expect a "weighted average payment shock of 32-33%" for 2024 and 2025 mortgage renewals and "48%" for 2026. The barrage of similar studies this year has almost been desensitizing.

But is it time to start sweating bullets?

We'll grab a calculator and crunch some numbers before plunging into full-blown panic mode.

Ever since OSFI revealed to the mortgage industry that it's possible to qualify an insured switch at the contract rate, lenders have been tripping over themselves to adopt the policy.

That's good news for non-deposit-taking lenders, like mortgage finance companies, which typically lead the pack on insured switch pricing. We expect that most of them will roll out support for contract-qualified switches. Already we've heard of multiple leading MFCs committing to it, including the big guns MCAP and First National, as well as smaller players like Strive and Radius.

There are big MICs, and then there are really big MICs.

Antrim Investments is the latter, reportedly the largest residential MIC in Canada with $1 billion in assets under management, a 50-year track record and 2,200 active loans.

We spoke with Will Granleese, Director and Portfolio Manager at Antrim, to determine what mortgage risks and opportunities he's seeing in the non-institutional lending world.

Here was his take...

Mortgage borrowers need rate relief like a desert hiker needs water, but the Bank of Canada is keeping rate cuts a mirage with no oasis in sight.

The BoC extended its rate pause today as expected—but moved the goalposts. The Bank now projects "that inflation will stay around 3½% until the middle of 2024," it said. That's up from 3% in its previous July forecast.

The Bank essentially implies it has a worse grip on inflation than it's been leading us to believe.

But the market isn't buying it.