Now for some news that doesn’t make us want to lie down in the Costco parking lot.

Housing costs continued to cool in May.

Mortgage interest costs actually declined slightly compared to last year.

Rent inflation also eased to its slowest pace since early 2022.

In other words, after spending the last few years behaving like an unsupervised toddler who found a drum set and an energy drink, housing costs are finally calming down.

For homeowners and future buyers, that’s encouraging news.

It’s the financial equivalent of hearing, “We’re all good here.”

So… Are Interest Rates Going Up Again?
I know.

You didn’t read 800 words about inflation because you’re passionate about economic indicators.

You want the answer to one question:

“Are rates going up again?”

According to Dr. Sherry Cooper, probably not.

Her expectation is that the Bank of Canada will remain on hold through the rest of 2026.

Which is economist language for:

“Everybody keep your hands and feet inside the ride.”

The inflation numbers the Bank really pays attention to are still behaving themselves.

Nobody at the Bank of Canada appears to be running through the hallways screaming into a clipboard.

What Does This Mean for You?
It means you can stop checking mortgage rates every time you open your phone.

At least for now.

The reality is that most Canadians aren’t being crushed by one giant expense.

They’re being nibbled to death by ducks.

Gas is up.

Groceries are up.

Insurance is up.

Your streaming subscriptions somehow multiplied while you weren’t looking.

And every trip to Costco starts with:

“I’m just grabbing one thing.”

Which is adorable.

Twenty minutes later you’re wheeling out a kayak, a flat of sparkling water, and enough snacks to survive a minor apocalypse.

That’s why reviewing your finances matters.

Not because something is wrong.

But because small leaks become big leaks.

I’ve reviewed mortgages for clients who were convinced everything was fine, only to discover opportunities that could save them hundreds or even thousands of dollars each month.

And unlike tomatoes, mortgage savings don’t suddenly increase by 45%.

My Take
The inflation headlines are giving major “we need to talk” energy.

Terrifying at first.

Usually less dramatic once you know the full story.

Yes, inflation moved higher.

Yes, groceries continue to test both our patience and our budgets.

And yes, tomatoes have fully entered their celebrity era and now require their own security detail.

But beneath the scary headlines, the bigger picture remains relatively stable.

Housing costs are easing.

Core inflation remains contained.

And according to Dr. Sherry Cooper, the Bank of Canada appears comfortable staying right where it is.

So before you cancel your vacation, build a bunker, or start growing tomatoes in your backyard as a retirement strategy, take a breath.

The economy isn’t perfect.

But it’s also not on fire.

Unlike the price of produce.

It has been a buyer’s market for a while now, but many buyers still feel stuck.

On paper, buyers have more choice, more time, and more negotiating power than they had during the peak frenzy. In Metro Vancouver, May 2026 sales were still below long-term seasonal averages, while active listings remained elevated compared to typical levels. That means buyers may have more selection than they have had in recent years. Greater Vancouver Realtors

But even with more inventory, buying a home still does not feel easy for many people.

Interest rates, qualification rules, monthly payments, closing costs, job uncertainty, and the fear of making the wrong decision are all very real. A buyer’s market does not magically make homes affordable. It simply changes the conversation.

Instead of rushing, competing, and removing conditions, buyers may now have more room to slow down and make better decisions.

That can mean:

Having time to review the property properly
Including financing and inspection conditions
Comparing more than one property
Negotiating on price, dates, or terms
Making decisions based on numbers, not panic

This is where mortgage strategy becomes so important.

A buyer’s market does not mean every buyer should buy. It means prepared buyers may have an opportunity to buy more strategically.

Before writing an offer, it is important to understand your full picture. That includes your down payment, closing costs, monthly payment comfort zone, credit, income, debt, and long-term goals.

The purchase price matters, but it is not the only number that matters.

A lower purchase price is helpful, but the real question is: can you comfortably carry the home, and does the mortgage strategy support your life?

Some buyers are waiting for rates to drop. Some are waiting for prices to drop further. Some are waiting because they are overwhelmed and do not know where to start.

There is nothing wrong with waiting if waiting is the right decision for you.

But if you are financially ready, this type of market may give you something that buyers did not always have over the last few years: breathing room.

More choice.
More time.
More ability to negotiate.
More opportunity to do proper due diligence.

The key is not to buy because the market says it is a good time.

The key is to buy when your numbers, your goals, and your comfort level all line up.

If you are wondering whether buying makes sense for you in today’s market, the best first step is not looking at listings. It is understanding your mortgage options, your monthly payment, and what you can comfortably afford.

Because a buyer’s market does not mean buying feels easy.

It means buying should be done with a plan.

Livian Smith
Dominion Lending Centres Producers West Financial

Our Door is Always Open!

Bank of Canada Holds Rates Steady: What It Means for Homeowners and Buyers

The Bank of Canada has once again held its overnight lending rate at 2.25%, choosing to leave rates unchanged amid ongoing economic uncertainty.

For Canadians wondering whether rates are going up, down, or staying put, today’s announcement provides an important signal: the Bank believes current interest rates are appropriate for the economic conditions we’re facing right now.

Why Did the Bank Hold Rates?

Several factors are influencing the Bank’s decision:

• Inflation remains elevated at 2.8%, although core inflation has eased closer to the Bank’s 2% target.

• Ongoing geopolitical tensions continue to impact global markets, particularly energy prices.

• Trade uncertainty remains a concern as Canada, the United States, and Mexico continue negotiations surrounding the future of CUSMA.

• Economic growth in Canada has slowed, but recent data suggests the economy may be stabilizing after a weak start to the year.

The Bank of Canada is walking a careful line between controlling inflation and avoiding additional pressure on an already soft housing market.

What Does This Mean for Mortgage Rates?

While the Bank of Canada rate directly impacts variable-rate mortgages and lines of credit, fixed mortgage rates are influenced more by bond markets.

Recent increases in bond yields and global uncertainty have placed upward pressure on fixed mortgage rates. However, today’s announcement suggests the Bank is not currently eager to increase borrowing costs further.

The current expectation among economists is that rates will likely remain stable through the remainder of the year.

Could Rates Still Go Higher?

It’s possible, but it is not the base-case forecast.

If inflation begins rising more broadly across the economy, the Bank could consider future rate hikes. However, policymakers are also aware that higher rates could further weaken housing activity and affordability.

For now, the most likely scenario is a period of stability while the Bank monitors inflation, economic growth, and global developments.

What Should Homeowners and Buyers Be Doing?
Rather than trying to predict every rate announcement, focus on building a mortgage strategy that fits your long-term goals.

Questions worth considering include:

• Does a fixed or variable rate align better with your comfort level?
• Are you planning to move, refinance, or renew in the next few years?
• Could a different mortgage structure help you pay off your mortgage faster?
• How would your finances handle future rate fluctuations?

Every situation is different, which is why mortgage planning should go beyond simply finding the lowest rate.

Final Thoughts

The Bank of Canada continues to take a cautious approach. While inflation remains above target, economic growth has softened, and uncertainty surrounding global trade and energy markets remains high.

For now, rates appear likely to stay where they are, giving homeowners and buyers a chance to focus on long-term financial planning rather than reacting to every headline.

If you have questions about your mortgage, upcoming renewal, purchase plans, or whether a fixed or variable strategy makes sense for you, I’d be happy to help.

Source: Adapted from analysis by Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres.

Canada’s Economy Sends a Strong Message: Recession Fears Put on Hold

If you’ve been following the headlines lately, you’ve probably heard plenty of talk about a potential recession, economic uncertainty, tariffs, and rising costs. However, Canada’s latest employment report tells a very different story.

In May, the Canadian economy added an impressive 87,800 jobs, the strongest monthly gain since 2024. This significant jump surprised economists and suggests that Canada’s economy remains far more resilient than many expected.

What Happened?
Several key indicators showed strength across the country:

• Unemployment fell to 6.6%
• Full-time employment increased by 154,000 positions
• Employment gains were seen in construction, transportation, hospitality, manufacturing, and recreation
• British Columbia added approximately 25,000 jobs
• Ontario led the way with 42,000 new jobs
• Average wages increased by 3.0% compared to last year

Perhaps most encouraging was the broad-based nature of the gains. Employment increased among private sector workers, public sector workers, and across several major industries.

What Does This Mean for Interest Rates?

Whenever economic data comes in stronger than expected, one of the first questions people ask is:

“Will this cause the Bank of Canada to raise rates?”

While a strong labour market can create inflationary pressure, the answer is likely not anytime soon.

Canada’s housing market remains relatively fragile, and housing plays a much larger role in our economy than it does in the United States. Although inflation remains a concern, particularly with higher energy costs and ongoing global uncertainty, economists continue to believe that both the Bank of Canada and the U.S. Federal Reserve are unlikely to raise rates this year.

What This Means for Homeowners and Buyers

For Canadians considering buying a home, renewing a mortgage, or refinancing, this report is encouraging news.

A stronger job market generally means:

• Greater consumer confidence
• More stable household finances
• Improved economic growth
• Reduced recession concerns

At the same time, the Bank of Canada appears cautious about making any moves that could further pressure the housing market.

While no one can predict the future with certainty, today’s economic environment continues to support the view that interest rates are more likely to remain stable than move significantly higher in the near term.

My Take

As a mortgage broker, I always encourage clients to look beyond the headlines.

One economic report doesn’t tell the whole story, but this jobs report is an important reminder that Canada’s economy remains remarkably resilient despite higher borrowing costs, trade uncertainty, and global challenges.

If you’re wondering how today’s economic environment could impact your mortgage, renewal, refinance, or home-buying plans, let’s have a conversation. Every situation is unique, and the right strategy is about much more than simply chasing the lowest rate.

The goal is finding a mortgage that fits your life today while supporting your goals for the future.

Source: Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres. This article is based on Dr. Cooper’s analysis of Canada’s May Labour Market Survey and related economic data.

The Hidden Financial Reality of “Grey Divorce” for Canadian Women

By Livian Smith, Licensed Mortgage Professional
Dominion Lending Centres Producers West Financial

Divorce later in life — often called “grey divorce” — is becoming more common across Canada. But behind the statistics are real women quietly asking themselves difficult questions:

“Can I afford to leave?”
“Will I be okay financially?”
“What happens to my retirement?”

A recent article by financial writer Melanie Huddart explored the growing financial concerns facing women over 50 who are considering separation after long-term marriages.

And honestly? This conversation matters.

Because for many women, especially those who stepped back from careers to raise children, support a spouse’s career, or care for family members, leaving a marriage isn’t just emotional. It can feel financially terrifying.

Why “Grey Divorce” Feels Different

When divorce happens later in life, there’s often less time to rebuild financially before retirement.

Many women in this stage of life may have:

• Smaller RRSPs
• Fewer CPP contributions
• Limited personal credit history
• Assets tied up in the family home
• Concerns about cash flow and retirement income

At the same time, they may also have substantial equity, investments, pensions, or rights they don’t fully understand yet.

One important point highlighted in the article is that even if a spouse’s name is the only one on title, the matrimonial home is still often considered shared property under provincial family law.

That surprises a lot of people.

The Emotional Side Nobody Talks About

What I see in real life is that many women stay stuck not because they don’t want change, but because they’re overwhelmed by uncertainty.

Questions start spinning:

• “Will I have enough income?”
• “Will I lose my home?”
• “Can I qualify for financing on my own?”
• “What happens to my retirement plans?”

Sometimes people assume they have to make a massive decision immediately.

They don’t.

The first step is simply understanding the full financial picture.

The Family Home Can Become a Tool — Not Just a Stress Point

For many Canadians over 50, the largest asset they own is their home.

And while that equity can feel inaccessible, there are actually multiple strategies that may help create flexibility depending on the situation:

• Refinancing
• Buyout options
• Reverse mortgages (also known as payment optional mortgages)
• Secured lines of credit
• Downsizing strategies
• Pension and asset equalization planning

Every situation is different, which is why having the right team matters:

• Family lawyer
• Financial planner
• Mortgage professional
• Accountant

Not just one person trying to figure everything out alone.

Retirement Planning Changes After Divorce

The article also highlighted how critical it is to review:

• CPP credit splitting
• Timing of CPP and OAS
• RRSP/RRIF withdrawal strategies
• Tax implications
• New monthly budgets as a single-income household

For many people, retirement after divorce may look different than originally expected — but different does not automatically mean impossible.

Sometimes it simply means restructuring.

A Conversation Worth Having

If you’re navigating separation later in life, or even quietly thinking about your options, you do not need to have every answer today.

But understanding what may be possible financially can reduce a tremendous amount of fear.

Many people are surprised to learn they may have more options, more equity, and more flexibility than they originally believed.

And sometimes, clarity alone can bring peace of mind.

If you’re curious what financing options may exist in your situation — whether that’s staying in your home, accessing equity, restructuring debt, or understanding retirement cash flow — it can help to have a confidential conversation with professionals who understand both the emotional and financial side of major life transitions.

To read the original article by Melanie Huddart, visit Money.ca.

Canadian Homebuyers Trying To Beat Rate Hikes.

Today the Canadian Real Estate Association (CREA) released statistics showing national existing-home sales rose 0.6% in November following the whopping 8.6% surge the month before. Sales could have been higher had it not been for the limited supply of homes for sale. Homebuyers are anxious to finalize purchases before the Bank of Canada hikes interest rates next year.Across the country, sales gains in Calgary, Edmonton, the B.C. interior, Regina and Saskatoon offset declines in activity in the GTA and Montreal.

The actual (not seasonally adjusted) number of transactions in November 2021 was firm historically, edging down a scant 0.7% on a year-over-year basis, missing the 2020 record for that month by just a few hundred transactions.

On a year-to-date basis, some 630,634 residential properties have traded hands via Canadian MLS® Systems between January and November 2021, far surpassing the annual record 552,423 sales for all of 2020.

“The fact is that the supply issues we faced going into 2020, which became much worse heading into 2021, are even tighter as we move into 2022. Interest rate hikes will make it even harder for new entrants to break into the market next year, even though activity may remain robust as existing owners continue to move around in response to all of the changes to our lives since COVID showed up on the scene. As such, the issue of inequality in the housing space will remain top of mind. One wildcard will be what policymakers decide to do with the national mortgage stress test, which could act as a kind of cushion against rising rates for young and/or first-time buyers. It could also make things that much harder for them,” said Shaun Cathcart, CREA’s Senior Economist.

New Listings

The number of newly listed homes rose by 3.3% in November compared to October, driven by gains in a little over half of local markets, including the GTA, Lower Mainland, Montreal, and many markets in Ontario’s Greater Golden Horseshoe.

With new listings up by more than sales in November, the sales-to-new listings ratio eased a bit to 77% compared to 79.1% in October. The long-term average for the national sales-to-new listings ratio is 54.9%.

About two-thirds of local markets were seller’s markets based on the sales-to-new listings ratio being more than one standard deviation above its long-term mean. The other one-third of local markets were in balanced market territory.

There were just 1.8 months of inventory on a national basis at the end of November 2021, tied with March 2021 for the lowest level ever recorded. The long-term average for this measure is more than 5 months.

Home Prices

In line with some of the tightest market conditions ever recorded, the Aggregate Composite MLS® Home Price Index (MLS® HPI) was up another 2.7% on a month-over-month basis in November 2021.
The non-seasonally adjusted Aggregate Composite MLS® HPI was up by a record 25.3% year-over-year in November.

Year-over-year price growth has crept back up to nearly 25% in B.C., though it remains lower in Vancouver, on par with the provincial number in Victoria, and higher in other parts of the province.

Year-over-year price gains are still in the mid-to-high single digits in Alberta and Saskatchewan, while gains have risen to about 13% in Manitoba.

Ontario saw year-over-year price growth hit 30% in November, with the GTA continuing to surge ahead after trailing most other parts of the province for most of the pandemic.

Greater Montreal’s year-over-year price growth remains at a little over 20%, while Quebec City was only about half that.

Price growth is running above 30% in New Brunswick (higher in Greater Moncton, lower in Fredericton and Saint John), while Newfoundland and Labrador is now at 10% year-over-year (lower in St. John’s).

Bottom Line–Lots of News Today

Canada continues to contend with one of the developed world’s most severe housing shortages; as our borders open to a resurgence of immigration, excess demand for housing will mount. The impediments to a rapid rise in housing supply, both for rent and purchase, are primarily in the planning and approvals process at the municipal and provincial levels. Liberal Party election promises do not address these issues.

Inflation pressures are mounting everywhere. The US posted a year-over-year inflation rate for November at 6.8%, up from 6.2% posted the month before. This undoubtedly led the US Federal Reserve to issue a hawkish statement today, intensifying their battle against inflation. They announced that they will double the pace at which it’s scaling back purchases of Treasuries and mortgage-backed securities to $30 billion a month, putting it on track to conclude the program in early 2022, rather than mid-year as initially planned.

Projections published alongside the statement showed officials expect three quarter-point increases in the benchmark federal funds rate will be appropriate next year, according to the median estimate, after holding borrowing costs near zero since March 2020.

According to Bloomberg News, “The faster pullback puts Powell in a position to raise rates earlier than previously anticipated to counter price pressures if necessary, even as the pandemic poses an ongoing challenge to the economic recovery. The Fed flagged concerns over the new omicron strain, saying that risks to the economic outlook remain, including from new variants of the virus.”

On more positive news, Canada’s inflation rate held steady at 4.7% y/y in November, well below the pace in the US. Excluding food and energy products, CPI ticked slightly lower to 3.1% from a year ago in November, or 2.7% on an annualized seasonally adjusted basis relative to the pre-shock February 2020 level. Roughly half of that 2.7% can still be attributed to rising expenses related to home-owning and car purchase or leasing. But the breadth of inflation pressure has also widened, with 58% of the consumer basket seeing faster-than-2% annualized growth in November from pre-pandemic (2019) levels on average over the last three months. That compares to 47% in February 2020. The broadening is expected to carry on in 2022 as rising input, transport and labour expenses continue to flow through supply chains for a wider swath of goods and services. Further disruptions to supply chains and energy markets from Omicron and the BC flood later in November are expected to add to price uncertainties in the near term.

In a speech today, Governor Tiff Macklem of the Bank of Canada assured the public that the Bank of Canada would remain the country’s number-one inflation fighter. Macklem clarified that flexibility in their new mandate won’t apply in situations — like now — when inflation is considerably above target.

At a press conference after the speech, Macklem noted he wasn’t comfortable with current elevated levels of inflation and the “time is getting closer” for policymakers to move away from the forward guidance. Markets are pricing in five interest rate hikes next year by the Bank of Canada.

Published DLC’s Chief Economist Dr Sherry Cooper

Refinancing Your Home.

One of the best parts about life is that it is ever-changing. This is one of the reasons that mortgages are available on short-term contracts (such as the standard 5-year) so that you can adjust your mortgage over time to best suit your needs. However, in some cases you cannot wait until the term is up. In fact, roughly six out of ten homeowners with the standard five-year fixed rate mortgage break their terms within three years.

There are a variety of reasons to refinance your mortgage such as wanting to leverage large increases in property value or get equity out of the home for renovations. In some cases, you may be unable to wait until the term is up due to life events such as divorce, a new relationship, kids going off to college or needing to consolidate debt.

Before you refinance, it is important to understand that if you do this during your term you will be breaking your mortgage agreement and there are penalties that come with that. If at all possible, it is best to wait until the end of the mortgage term before refinancing.

If you cannot wait, it is important to understand how your lender is going to calculate the penalty if you break a fixed-rate mortgage. Canada’s big banks calculate mortgage penalties based on the discount you were given from the posted rate at the time that you signed your mortgage agreement. The bank firstly takes their new posted rate for whatever time you have left in your mortgage – if you break a five year contract on year three, this would be two years – and apply the same discount they first gave you. The difference between the two shows them the amount of interest they would lose for the rest of the term based on your current balance. This is what then becomes the penalty for breaking your fixed-year term and, in many cases, can be quite hefty. Other lenders such as credit unions and monolines will use the interest rate differential or a flat three-month interest penalty.

Beyond the penalties, there are a few other points to consider before refinancing:

• You can tap into 80 per cent of the value of your home
• You cannot qualify for default insurance which can limit your lender choice
• You would have to re-qualify under the current rates and rules – including passing the “stress test” again

So what can you do? There is an option to sign a fixed rate for a shorter term, such as three years, or you can also consider a variable rate as the penalties for breaking these mortgages are much lower.

Talking to a mortgage broker about refinancing can provide you access to even greater rates and mortgage plans to best suit your needs and what you are trying to accomplish through your refinancing strategy.

Benefits of Refinancing

Regardless of why you are looking to refinance, it can come with a host of great benefits when done properly!

1.   A Lower Interest Rate

Depending on where you are in your mortgage term, you could refinance to get a better rate – especially when done through a mortgage broker. On average, a mortgage broker has access to 90 lenders and is able to find you the best rate versus traditional banks which only have access to their own rate.

2.   Consolidating Your Debt

When it comes to debt, there are many different types from credit cards to lines of credit to school loans to mortgages. However, many types of consumer debt have much higher interest rates than those you would pay on a mortgage. Refinancing can free up cash to help you pay out these debts. While it may increase your mortgage, your overall payments could be far lower and would be a single payment versus multiple sources. Keep in mind, you need at least 20 percent equity in your home to qualify.

3.   Modifying Your Mortgage

The beauty of life is that it is ever-changing and sometimes you need to pay off your mortgage faster or change your mortgage type. Maybe you came into some extra money and want to put it towards your mortgage or maybe you are weary of the market and want to lock in at a fixed-rate for security. It is always best to do this when your mortgage term is up, but talk to a mortgage specialist about potential penalties if waiting is not possible.

4.   Utilize Your Home Equity
One of the biggest reasons to buy in the first place is to build up equity in your home. Consider your home equity as the difference between your property’s market value and the balance of your mortgage. If you need funds, you can refinance your mortgage to access up to 80% of your home’s appraised value in cash!

If you are considering refinancing your home, or wondering if it is the best option for you, don’t hesitate to reach out to a Dominion Lending Centres Mortgage Professional today for expert advice!

Written by My DLC Marketing Team

How to Save with a Variable Mortgage.

When it comes to mortgages, the age-old question remains: “Should I go with a variable or fixed-rate?”. To make an informed decision, it is important to look at the type of buyer and the historical trends.

When it comes to variable versus fixed-rate, it is important to understand what these mortgages are based off of. Fixed mortgages are so named as they are based on a fixed interest rate that is set for the duration of the term with fixed payments. On the other hand, variable-rate mortgages fluctuate with the Prime Rate. This can either mean fluctuations in your payment, or if you choose to have set payments, the interest portion of the payment.

In the last 10 years, the prime lending rate has gone from 2.50% to 3.95% and now sits at 2.45% as of January 2022. Due to recent events, these rates have seen even more of a downturn providing huge benefits to new borrowers looking to pay as little as possible.

While a variable-rate mortgage is linked to the Prime Rate, which could cause fluctuations, historically the choice of a variable rate mortgage over a fixed term has allowed borrowers to save in interest costs.

However, due to the uncertainty and potential fluctuations that can occur with a variable-rate mortgage, it comes down to the borrowers comfort. Some individuals have no wiggle room in their budget for potential changes in mortgage payments, or they do not like the uncertainty. For these clients, a fixed-rate would be the best choice.

On the other hand, clients who qualify for variable-rate mortgages have a unique opportunity to take advantage of lower interest rates. If you have a variable-rate mortgage, you can either set a fixed-payment so that, if the interest rate drops, it means you are paying more on your principal loan each month. Or, if you have flexible payments, you may see your monthly payments drop in accordance to decreases in the Prime Rate. However, since every 10% increase in payment can save three years off the amortization of a five-year term, having fixed payments provide extra benefits. After all, extra pennies towards the principle can help make a difference over the life of a 25 or 30 year mortgage.

Let’s look at the following example:

Amy and Jake have a balance owing of $300,000 on their mortgage with a variable rate at Prime minus .80%, (giving us 1.65%) with current payments set at $703 bi-weekly. The mortgage matures in 24 months but they are considering locking in for a new five-year term at 3.34%. New payments would be $739. As much as they love their home, they are considering a move in the next couple years.

When reviewing this mortgage, it is more beneficial for them to keep the remaining variable-rate in place for two years. However, if they set the payments based on 3.34% or $739 bi-weekly, this allows them to pay an extra $72 on their mortgage per month. In 24 months, the savings on interest is $4,000 and their outstanding balance is $4,000 less than by staying in the fixed rate.

Another benefit to variable-rate mortgages is that, if you choose to sell before the mortgage term is up, the penalty is typically only three months interest as opposed to much heavier interest rate differential (IRD) calculations used to determine fixed-rate mortgage penalties.

With this strategy they don’t have to feel pressure to lock-in today, plus they can continue taking advantage of the lower variable rate.

If your mortgage is maturing in the next 90-180 days and you’re not quite sure what to do, it is a good idea to contact a Dominion Lending Centres Mortgage Professional. Not only can they provide tips for your existing variable-rate mortgage to help save you money, but they can help you assess whether fixed-rate is right for you or if you should make the switch.

Written by My DLC Marketing Team

BANK OF CANADA BUSINESS SENTIMENT LOWEST SINCE 2009

Canadian Business Sentiment Is Negative 

• Forward-looking sales indicators have collapsed. Many businesses referred to elevated uncertainty. Still, roughly half of firms anticipate that their sales will recover to pre-pandemic levels within the next year.
• Businesses in most regions and sectors intend to cut their investment spending significantly. Hiring plans are muted, although a quarter of firms plan to refill some positions after recent layoffs.
• Reports of capacity pressures and labour shortages have fallen significantly. This suggests a substantial widening in economic slack.
• Expectations for input and output price growth, as well as for overall inflation, are all down considerably.
• Credit conditions have tightened significantly, but government measures are a helpful offset.

DR. SHERRY COOPER

Chief Economist, Dominion Lending Centres

GLOBAL MARKETS IN TURMOIL AS OIL PLUNGES, PROPELLING YIELDS TO RECORD LOWS

Global Markets in Turmoil, Oil Prices Plunge Along With Yields

Markets shuddered in the face of a price war for oil and the economic fallout from the growing outbreak of coronavirus. Frightened investors poured into haven assets sending yields to unprecedented lows. Oil prices tumbled 30% after Saudi Arabia said it would cut most of its oil prices and boost output when Russia refused to join OPEC in propping up prices (see chart below). Foreign exchange markets convulsed, as the steep drops in oil and share prices overnight sparked a flight from commodity-linked currencies into the perceived safety of the Japanese yen and the US dollar. The Canadian dollar fell to 0.7362 as of this writing. The Government of Canada 5-year bond yield was as low as 0.284% overnight but has since recovered roughly 0.535%, still well below Friday’s closing level of approximately 0.65% (second chart below).

Stock prices have fallen very sharply in the first hour of North American trading. Panic selling sent the Dow down 2,000 points, and the S&P500 sank 7% after triggering a circuit breaker that halted trade for 15 minutes. The TSX took a dizzying nosedive on the open, down more than 1400 points or nearly 9.0% led down by oil stocks and financials.

The spread of coronavirus outside of China tripled over the past week. The US State Department announced yesterday that older people should avoid travel on cruises, particularly if they have compromised immune systems. All of this amplifies recession fears as the outbreak spreads.

There is concern in the US that the government is not handling the outbreak appropriately. Mixed messaging and an inadequate supply of testing kits came as the number of coronavirus cases in the US topped 500 over the weekend. President Trump retweeted a meme of himself fiddling on Sunday, drawing a comparison to the Roman emperor Nero who fiddled as Rome burned around him. This is a time when leadership is of paramount importance.

Borrowing costs are falling sharply–a silver lining for first-time homebuyers. The best advice for investors is not to panic. This, too, shall pass, although no one knows when.

DR. SHERRY COOPER

Chief Economist, Dominion Lending Centres