Behind the Scenes: Macklem's Moves and the Future of Mortgage Rates

Jamie Ushko • December 19, 2023

In the dynamic world of Canadian monetary policy, Bank of Canada Chief Tiff Macklem has recently taken center stage. Just days ago, it seemed "premature" for rate adjustments, but now Macklem suggests they might be on the horizon in 2024. As the bond market interprets his moves, borrowers are left wondering about the future of mortgage rates.

The Economic Shuffle

Macklem's dance with the idea of rate adjustments is not without its complexities. The bond market remains skeptical, accustomed to the cryptic nature of central bankers grappling with inflation. Macklem, aware of Canada's economic slowdown, is contemplating the timing of rate adjustments, likely in 2024. The bond market, sensing this, is already making its own predictions, not waiting for official guidance from the Bank of Canada.

Beyond the Summit: What Comes Next for Mortgage Rates


For mortgage borrowers on the edge of their seats, anticipating what comes after the rate peak is a common sentiment. Predicting yields in this rollercoaster is no easy task, but historical market tendencies provide some guidance.


Typically, after a rate peak:


  1. Yields sink as the market senses the peak.
  2. The drop accelerates with ongoing data confirming the peak.
  3. Yields fall across the board, often months before the official rate adjustment.
  4. Longer-term yields initially drop more than short-term yields.
  5. Short-term rates catch up once rate adjustments become imminent.


If history holds true, rates may continue a jagged descent until the rate-adjustment cycle kicks in, with potential indicators on the horizon.

Economic Signals and Mortgage Rates

Borrowers should keep an eye on key indicators signaling an imminent easing cycle, such as inflation in the 2s, unemployment in the 6s, dovish BoC communications, and high-rate adjustment probabilities in upcoming meetings. Macklem hints that he'd like to see sustained inflation deceleration for three or four months before the first adjustment, potentially placing it in March or April of 2024.

Bank Credit Spreads and Mortgage Magic

Despite whispers of a recession, bank credit spreads remain cool, signaling stability. This is good news for mortgage rates, as shrinking credit spreads often lead to more affordable variable rates. If all aligns well, we might see more discounts on uninsured floating-rate mortgages in the coming year.

Fixed Rates and the High-Five Club

In the uninsured fixed-rate market, rates are dipping into the 5% range for various terms. Big banks are stepping up their game, offering competitive rates. With room for rates to fall further, uninsured fixed rates may see a decline in January, pending economic data.

Navigating the Value Zone

Long-term fixed rates may feel restrictive in the current cycle. With market-implied rates suggesting potential adjustments, variable rates may outperform 3-, 4-, and 5-year fixed terms. For those seeking a financial safety net, hybrid mortgages could be a solution, blending fixed and variable components.

Insights into Mortgage Trends and Regulatory Shifts

Amid regulatory changes, borrowers face evolving rules. The mortgage world introduces hybrid options like Scotia's STEP and TD's FlexLine for those seeking a balance between fixed and variable rates.

Stay tuned for updates as the mortgage landscape evolves.

Unlocking Mortgage Solutions with Mortgages by Jamie – Your Partner in Financial Solutions.

Jamie Ushko

Mortgage Broker

New To Mortgage Financing? Get Pre-Approved

By Jamie Ushko • February 19, 2025
If you’re thinking about buying a property, but you’re not sure where to start, you’ve come to the right place! Let’s discuss how getting pre-approved is one of the first steps in your home buying journey. Just like you wouldn’t go into a restaurant without knowing if you have enough money to buy your meal, it’s not a good idea to be shopping for a home without an understanding of how much you can afford. You can browse MLS from your couch all you want beforehand, but when you’re ready to start looking at properties with a real estate agent, you need a pre-approval. Now, as there may be some confusion around exactly what a pre-approval does and doesn’t do, let’s discuss it in detail. First of all, a pre-approval is not magic, and it’s not binding. A pre-approval is not a contract that will guarantee mortgage financing despite changes to your financial situation. Instead, a pre-approval is simply the first look at your overall financial health that will point you in the right direction before you’re ready to apply for a mortgage. Said in another way, a pre-approval is a map that gives you the plan to secure an actual approval. After going through the pre-approval process, you’ll know how to qualify for a mortgage and at what amount. When considering your mortgage application, lenders look at your income, credit history, assets vs liabilities, and the property itself. Working through a pre-approval will cover all these areas and will uncover any major obstacles that might be in your way of securing financing. The best time to secure a pre-approval is as soon as possible; it’s never a bad idea to have a plan. Here are a few of the obstacles that a pre-approval can uncover: You’ve recently changed jobs, and you’re still on probation Your income relies heavily on extra shifts or commissions You’re unaware of factual mistakes or collections on your credit report You don’t have an established credit profile You don’t have enough money saved for a downpayment Additional debt is lowering the amount you qualify for Really anything you don't know that you don't know Even if you believe you have all your ducks in a row, working through the pre-approval process with an independent mortgage professional will ensure you have the best chance of securing a final approval. As a point of clarity, a pre-approval is not the same as a pre-qualification. This is not typing a few things into a website, calculating some numbers, and thinking you’re all set. A pre-approval includes providing your financial information, looking at your credit report, discussing a plan for securing mortgage financing with a mortgage professional, and even submitting documents ahead of time. Mortgage financing can be a daunting process; it doesn’t have to be. Having a plan in place and doing as much as you can beforehand is essential to ensuring a smooth home buying experience. As there is no cost for getting a mortgage pre-approval, there is absolutely no risk. Consider starting the process right now! If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Collections Can Prevent Mortgage Financing

By Jamie Ushko • February 12, 2025
A question that comes up from time to time when discussing mortgage financing is, “If I have collections showing on my credit bureau, will that impact my ability to get a mortgage?” The answer might have a broader implication than what you might think; let's spend a little time discussing it. Collections accounts are reported on your credit bureau when you have a debt that hasn’t been paid as agreed. Now, regardless of the reason for the collection; the collection is a result of delinquency, it’s an account you didn’t realize was in collections, or even if it’s a choice not to pay something because of moral reasons, all open collections will negatively impact your ability to secure new mortgage financing. Delinquency If you’re really late on paying on a loan, credit card, line of credit, or mortgage, and the lender has sent that account to collections, as they consider it a bad debt, this will certainly impact your ability to get new mortgage financing. Look at it this way, why would any lender want to extend new credit to you when you have a known history of not paying your existing debts as agreed? If you happen to be late on your payments and the collection agencies are calling, the best plan would be to deal with the issue head-on. Settle the debts as quickly as possible and work towards establishing your credit. Very few (if any) lenders will even consider your mortgage application with open collections showing on your credit report. If you’re unaware of bad debts It happens a lot more than you’d think; people applying for a mortgage are completely unaware that they have delinquent accounts on their credit report. A common reason for this is that collection agencies are hired simply because the lender can’t reach someone. Here’s an example. Let’s say you’re moving from one province to another for work, you pay the outstanding balance on your utility accounts, change your phone number, and make the move. And while you think you’ve paid the final amount owing, they read your meter, and there is $32 outstanding on your bill. As the utility company has no way of tracking you down, they send that amount to an agency that registers it on your credit report. You don't know any of this has happened and certainly would have paid the amount had you known it was due. Alternatively, with over 20% of credit reports containing some level of inaccuracy, mistakes happen. If you’ve had collections in the past, there’s a chance they might be reporting inaccurately, even if it's been paid out. So as far as your mortgage is concerned, it really doesn’t matter if the collection is a reporting error or a valid collection that you weren’t aware of. If it’s on your credit report, it’s your responsibility to prove it’s been remediated. Most lenders will accept documentation proving the account has been paid and won’t require those changes to reflect on your credit report before proceeding with a mortgage application. So how do you know if you’ve got mistakes on your credit report? Well, you can either access your credit reports on your own or talk with an independent mortgage advisor to put together a mortgage preapproval. The preapproval process will uncover any issues holding you back. If there are any collections on your bureau, you can implement a plan to fix the problem before applying for a mortgage. Moral Collections What if you have purposefully chosen not to pay a collection, fine, bill, or debt for moral reasons? Or what if that account is sitting as an unpaid collection on your credit report because you dispute the subject matter? Here are a few examples. A disputed phone or utility bill Unpaid alimony or child support Unpaid collections for traffic tickets Unpaid collections for COVID-19 fines The truth is, lenders don’t care what the collection is for; they just want to see that you’ve dealt with it. They will be reluctant to extend new mortgage financing while you have an active collection reporting on your bureau. So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future. If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!
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