Today’s post explains which type of lender is typically offering the best value to the three different segments of mortgage borrowers that were created by last fall’s mortgage rule changes.

Today, our policy makers can’t fully explain why average incomes aren’t rising at a much faster rate. This is the key question for anyone keeping an eye on mortgage rates today because they should move in the same direction as average incomes over time, and at a similar speed. I have read many theories about why average wages aren’t rising as expected and a recent article, Wages vs. Jobs by Gary Shilling, offers particularly valuable insight. Today's post provides a summary of Shilling’s key points with my comments included as well.

Last week was a relatively uneventful one for the factor's affecting Canadian mortgage rates so today’s post highlights five key questions that borrowers should be focusing on as we look toward the fall real-estate market.

While the latest Canadian headline employment number came in a little lower than expected, the underlying details in the July employment data were encouraging. Bluntly put, if you’re looking for mortgage-rate implications there is nothing in the latest data that would discourage the Bank of Canada (BoC) from increasing its policy rate by another 0.25% before the end of the year, but that said, there also weren’t any new indications that our average labour costs are increasing to a degree that would require the Bank to accelerate its rate-hike timetable further. Here is a summary of the key details from the latest report.

Last Friday we learned that Canadian GDP grew by 0.6% in May, which was three times the consensus estimate of 0.2% for the month. It now looks as if our second-quarter growth rate will come close to matching the 3.7% rate we saw in the first quarter (which led the G7 countries). Interestingly, while Government of Canada (GoC) bond yields initially surged higher on the news, they actually closed lower by end of day on Friday. While that may seem counterintuitive, because bond yields should rise if investors expect higher interest rates in future, here are some of the factors that may have contributed to that outcome.

Market watchers (and mortgage borrowers) are looking for signs that reinforce the view that the BoC will continue to raise rates - and suddenly every positive economic data point is being interpreted as further proof that more near-term rate hikes are inevitable. In today’s post I am going to put on my contrarian hat (it’s never too far from reach) and make the case that the consensus is now overestimating future path for Canadian mortgage rates.