Breaking Mortgage News: Lenders Slash Fixed Rates by Up to 30 Basis Points & The Finance Committee Urges The Government to Prevent The RBC-HSBC Deal

Breaking Mortgage News Fixed Rate Slashed & RBC-HSBC Deal At a Glance

Mortgage providers in Canada have been reducing fixed mortgage rates in response to a sharp decline in bond yields. Over a dozen national mortgage providers have dropped their rates by 10 to 30 basis points, with most rate changes concentrated in the 3- to 5-year terms. However, the rate drops were not expected to match the decline seen in bond yields due largely to risk premiums.

Meanwhile, the House of Commons Standing Committee on Finance has called on the Minister of Finance to reject RBC’s proposed acquisition of HSBC Canada, citing concerns over competition and potential fee increases for Canadians.

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The Details of Breaking Mortgage News: Lenders Slash Fixed Rates by Up to 30 Basis Points

Mortgage lenders in Canada have been reducing their fixed mortgage rates in response to a significant decrease in bond yields. The 5-year Government of Canada bond yield, which is a key factor in determining mortgage rates, has dropped by nearly 30 basis points and is currently around 3.80%.

This represents a decline of over 60 basis points from its peak of 4.42% in early October. More than 12 major mortgage providers in the country have already lowered their rates by 10 to 30 basis points, particularly in the 3- to 5-year terms. This is based on data compiled by MortgageLogic.news

Experts, like Ryan Sims from TMG The Mortgage Group, have noted that while mortgage rates are decreasing, they are not dropping as much as bond yields. This is because lenders and mortgage providers are factoring in risk premiums given the possibility of an economic downturn in the near future. That means for the possibility of an impending economic downturn, lenders and mortgage providers will probably continue to include risk premiums in their rates.

About The Finance Committee Urges The Government to Prevent The RBC-HSBC Deal

The Finance Committee of the House of Commons has also recommended that the Minister of Finance reject RBC’s proposed acquisition of HSBC Canada. They argue that there is already limited competition in the Canadian banking sector and removing HSBC as a competitor could lead to higher banking fees for consumers.

HSBC is a significant player in Canada’s mortgage market, often offering competitive rates for various terms. The Competition Bureau approved the deal but acknowledged that it would reduce competition between Canada’s largest and seventh-largest banks.

RBC’s CEO, Dave McKay, sees the acquisition as a unique opportunity that would strengthen the bank’s offerings for commercial clients, newcomers to Canada, and affluent customers in need of global banking and wealth management services.

Wrap Up

Mortgage providers in Canada have been reducing fixed mortgage rates in response to a significant decrease in bond yields. The 5-year Government of Canada bond yield, which typically affects fixed mortgage rates, has dropped by nearly 30 basis points and is currently at around 3.80%. This represents a decrease of over 60 bps from its high of 4.42% in October. Over a dozen national mortgage providers have lowered their rates by 10 to 30 bps, with most changes occurring in the 3- to 5-year terms. However, experts suggest that the rate cuts have not fully matched the decline in bond yields due to risk premiums.

Additionally, the House of Commons Standing Committee on Finance has recommended that the Minister of Finance reject RBC’s proposed acquisition of HSBC Canada. They argue that the deal would reduce competition in an already uncompetitive financial sector and potentially lead to higher fees for consumers. HSBC, as the 7th largest bank, is a key player and competitor in Canada’s mortgage market.

Breaking Mortgage News: Lenders Slash Fixed Rates by Up to 30 Basis Points & The Finance Committee Urges The Government to Prevent The RBC-HSBC Deal Chinese version