The Path Ahead

What is the Canadian Mortgage Bond and why should I care? Where are fixed mortgage rates heading in 2023? Why is it better to work with a Mortgage Agent over your bank? I will cover all of these items as well as the path ahead for Canadian mortgage rates in today's article of Paul's Mortgage Insights.

Let's start with the Canadian Mortgage Bond (CMB). The CMB is a type of bond that is issued by the Canadian government. As per the CMHC, Canada Mortgage Bonds help stabilize access to mortgage funding in all economic conditions. The Canada Mortgage Bonds Program lets approved financial institutions pool eligible insured mortgages into marketable securities. Investors buy these securities, generating funds for residential mortgage financing.

The CMB rate has a direct impact on fixed rate mortgages in Canada. Fixed rate mortgages are mortgage loans where the interest rate remains the same for the entire term of the loan. The interest rate on these mortgages is determined by the CMB rate, which acts as a benchmark for the mortgage market.

When the CMB rate increases, the cost of borrowing also increases, which means that the interest rate on fixed rate mortgages will also rise. This can lead to higher monthly mortgage payments for new borrowers. On the other hand, if the CMB rate decreases, the cost of borrowing decreases, and the interest rate on fixed rate mortgages will also decrease. This can result in lower monthly mortgage payments for new borrowers.

Here is a graph showing the recent history of the CMB:

It's important to note that the CMB rate is just one of many factors that can impact the interest rate on fixed rate mortgages in Canada. Other factors, such as the state of the economy, the level of competition among lenders, and the overall demand for mortgages can also play a role in determining the interest rate on fixed rate mortgages. I anticipate we will see further drops across the board in the fixed rate mortgage market in the coming weeks for all of the factors mentioned above.

When it comes to securing a mortgage in Canada, many homebuyers may feel overwhelmed by the process. Between the numerous lenders, mortgage types, and interest rates, it can be difficult to know where to start. This is where working with a Mortgage Agent can make all the difference.

A Mortgage Agent is a professional who acts as a middleman between homebuyers and lenders. They have a wealth of knowledge about the mortgage industry, and can help guide you through the entire process of securing a mortgage, from start to finish.

Here are some of the key benefits of working with a Mortgage Agent in Canada for purchases, refinances, renewals, and all other mortgage types:

1. Access to multiple lenders: Mortgage Agents have relationships with a wide variety of lenders, including banks, credit unions, and other financial institutions. This means they can help you compare and contrast different mortgage options and find the one that best fits your needs and financial situation.
2. Personalized financial analysis: Mortgage Agents will take the time to get to know you and your financial picture, including your income, debts, and credit score. This allows them to recommend the best mortgage options for your specific needs, and helps you avoid costly mistakes.
3. Save time and hassle: Securing a mortgage can be a time-consuming and complicated process. Working with a Mortgage Agent can take the stress out of the process, allowing you to focus on finding your dream home. They handle all the paperwork, phone calls, and negotiations with lenders, freeing up your time to focus on other important tasks.
4. Get the best mortgage rate: Mortgage Agents have access to the best mortgage rates available in the market, and can negotiate on your behalf to get you the best deal possible. This can save you thousands of dollars in interest over the life of your mortgage.
5. Expert advice: Mortgage Agents are experts in their field and have a wealth of knowledge about the mortgage industry. They can answer any questions you have and provide you with valuable advice to ensure you make the best decision for your financial future.
6. No cost to you: You don’t pay any additional fees for using a Mortgage Agent

The current rate environment is fast changing and requires lots of analysis to ensure you are in the best position now and over the term of your mortgage contract. I have over 15 years of experience advising clients on their finances and would love to discuss your specific situation (or someone you may know) to help you navigate through your options.

Thanks for your support as always! I love what I do and I love helping others to succeed in their real estate goals. Make sure to check out my weekly podcast “The Ottawa Real Estate Podcast” available on YouTube, Spotify, Google Play. iTunes and all other streaming services.?Also, be sure to check out my website www.paulstevenson.ca for the latest blog posts and market updates.

-Paul S