August 5, 2025 • 7 mins
In this episode, the discussion begins with a welcome and an overview of the current Canadian mortgage rates, followed by a sponsor message from Real Approved Inc. The conversation then explores the economic signals and the impact of the Federal Reserve's recent rate cuts. The episode highlights Equitable Bank's issuance of a 300 million CAD deposit note and its significance within the industry. The Bank of Canada's Financial Stability Report is also examined, providing insights into the current economic landscape. The episode concludes with closing remarks and a sponsor reminder from Real Approved Inc.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:04):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
helping Canadians achieve their homeownershipdreams.
(00:28):
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're starting off with a topic that'son a lot of people's minds: Canadian mortgage
rates.
There's been quite a bit of movement in thefinancial markets recently, and it's raising
questions about where mortgage rates areheaded.
(00:50):
That's right, Steve.
It seems like the economic landscape isshifting, especially with the recent dip in
Government of Canada bond yields.
This is putting some pressure on fixed mortgagerates, and it's all tied to broader economic
signals, particularly from our neighbors to thesouth.
Exactly, Janine.
The U.S.
(01:10):
economy is showing signs of weakening, which isaffecting bond yields here in Canada.
There's been an escalation in Donald Trump'sglobal trade war, and the recent U.S.
labor market report showed fewer jobs wereadded in July than expected.
This has increased the odds of a Septemberinterest rate cut by the Federal Reserve.
That, in turn, could put downward pressure onCanadian bond yields.
(01:35):
And while that's happening, Doug Porter, thechief economist at Bank of Montreal, mentioned
that the prospect of rate cuts by the FederalReserve could improve the bond markets,
including here in Canada.
But he also cautioned that we shouldn't expecta dramatic drop in fixed rates immediately.
Right, he suggested that while some relief infixed-rate mortgages might be on the horizon,
(01:58):
it's likely to be modest.
Even a small decrease, like a quarter-point,could be beneficial, but the Bank of Canada has
set a high bar for any rate cuts.
The economy needs to weaken further without asurge in inflation for them to consider it.
It's a delicate balance, isn't it?
The ongoing trade tensions, especially with theU.S., are creating economic uncertainty.
(02:21):
Trump's decision to increase tariffs on certainCanadian imports to thirty-five percent adds to
the complexity of the situation.
It seems like the trade uncertainty couldhinder economic growth more than it would cause
inflation, according to Porter.
Exactly.
And this prolonged trade uncertainty mighteventually lead the Bank of Canada to consider
(02:43):
easing monetary policy further.
But they'll need to be convinced that inflationisn't a significant threat.
It's a waiting game to see how things unfoldand how these factors will influence the Bank's
decisions in the coming months.
It certainly is a lot to keep track of, Steve.
For homeowners and potential buyers, thesedevelopments are crucial to watch as they could
(03:06):
impact mortgage decisions significantly.
We'll continue to monitor the situation closelyand keep our listeners updated as things
evolve.
Now, shifting gears to some significant newsfrom Equitable Bank.
They have successfully closed a 300 millionCanadian dollars floating rate deposit note
issuance.
(03:26):
This is a big milestone for the bank, Janine,and it reflects what they describe as "strong
investor confidence" in their growth potential.
Absolutely, Steve.
The issuance was actually two timesoversubscribed, which indicates that there's a
lot of investor trust in Equitable Bank'sfinancial stability and future prospects.
(03:47):
It's always encouraging to see such positiveinvestor sentiment, especially in today's
economic climate.
Definitely, Janine.
The notes mature on August 3, 2027, and wereissued with a coupon of the Canadian Overnight
Repo Rate Average plus 90 basis points.
(04:07):
The demand was so high that the final orderbook reached 605.6 million Canadian dollars,
allowing the bank to increase the issuance sizefrom the original 200 million Canadian dollars.
It's quite remarkable, Steve.
David Wilkes, the vice president and head offinance at Equitable Bank, mentioned that this
issuance provides a "competitively pricedsource of funding" that will further strengthen
(04:32):
the bank’s capacity to innovate and delivervalue to their investors.
It's a testament to their leadership andstrategic direction.
And it's also worth noting that the issuanceled to a favorable repricing of their secondary
curve, achieving the tightest spread on recordfor a comparable term.
This is a clear indicator of the bank's solidfinancial footing and the market's confidence
(04:54):
in their operations.
Yes, and while these notes are not eligible forCanada Deposit Insurance Corporation insurance,
they rank equally with all of the bank’s otherunsecured and unsubordinated liabilities.
This move is backed by a group of financialinstitutions, including BMO Capital Markets,
CIBC Capital Markets, National Bank FinancialMarkets, and Scotiabank as joint leads and
(05:18):
bookrunners, with RBC Capital Markets and TDSecurities supporting as co-managers.
The Bank of Canada’s Financial Stability Reportalso highlighted that the financial system
began the year with increased resilience, whichis a positive sign.
However, it also cautioned about challengesfrom global trade conflicts that could have
(05:39):
economic repercussions.
Despite these challenges, the fixed-income andcore funding markets have remained stable,
providing a conducive environment for bankslike Equitable to raise capital.
It's an interesting time, Steve.
As of the end of April 2025, Equitable Bankheld 134 billion Canadian dollars in combined
(06:01):
assets under management and administration.
This substantial asset base, coupled with thefresh capital from the deposit note issuance,
positions them well to navigate the currenteconomic landscape and continue providing value
to their clients.
Indeed, Janine.
It's going to be interesting to see howEquitable Bank leverages this new funding to
(06:22):
further their growth and innovation in thecoming years.
That wraps up our discussion for today.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
estate.
Before you go, a quick reminder (06:39):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
homeownership goals. Catch you next time, and stay informed with the latest industry
(07:04):
insights!
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:04):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
helping Canadians achieve their homeownershipdreams.
(00:28):
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're starting off with a topic that'son a lot of people's minds: Canadian mortgage
rates.
There's been quite a bit of movement in thefinancial markets recently, and it's raising
questions about where mortgage rates areheaded.
(00:50):
That's right, Steve.
It seems like the economic landscape isshifting, especially with the recent dip in
Government of Canada bond yields.
This is putting some pressure on fixed mortgagerates, and it's all tied to broader economic
signals, particularly from our neighbors to thesouth.
Exactly, Janine.
The U.S.
(01:10):
economy is showing signs of weakening, which isaffecting bond yields here in Canada.
There's been an escalation in Donald Trump'sglobal trade war, and the recent U.S.
labor market report showed fewer jobs wereadded in July than expected.
This has increased the odds of a Septemberinterest rate cut by the Federal Reserve.
That, in turn, could put downward pressure onCanadian bond yields.
(01:35):
And while that's happening, Doug Porter, thechief economist at Bank of Montreal, mentioned
that the prospect of rate cuts by the FederalReserve could improve the bond markets,
including here in Canada.
But he also cautioned that we shouldn't expecta dramatic drop in fixed rates immediately.
Right, he suggested that while some relief infixed-rate mortgages might be on the horizon,
(01:58):
it's likely to be modest.
Even a small decrease, like a quarter-point,could be beneficial, but the Bank of Canada has
set a high bar for any rate cuts.
The economy needs to weaken further without asurge in inflation for them to consider it.
It's a delicate balance, isn't it?
The ongoing trade tensions, especially with theU.S., are creating economic uncertainty.
(02:21):
Trump's decision to increase tariffs on certainCanadian imports to thirty-five percent adds to
the complexity of the situation.
It seems like the trade uncertainty couldhinder economic growth more than it would cause
inflation, according to Porter.
Exactly.
And this prolonged trade uncertainty mighteventually lead the Bank of Canada to consider
(02:43):
easing monetary policy further.
But they'll need to be convinced that inflationisn't a significant threat.
It's a waiting game to see how things unfoldand how these factors will influence the Bank's
decisions in the coming months.
It certainly is a lot to keep track of, Steve.
For homeowners and potential buyers, thesedevelopments are crucial to watch as they could
(03:06):
impact mortgage decisions significantly.
We'll continue to monitor the situation closelyand keep our listeners updated as things
evolve.
Now, shifting gears to some significant newsfrom Equitable Bank.
They have successfully closed a 300 millionCanadian dollars floating rate deposit note
issuance.
(03:26):
This is a big milestone for the bank, Janine,and it reflects what they describe as "strong
investor confidence" in their growth potential.
Absolutely, Steve.
The issuance was actually two timesoversubscribed, which indicates that there's a
lot of investor trust in Equitable Bank'sfinancial stability and future prospects.
(03:47):
It's always encouraging to see such positiveinvestor sentiment, especially in today's
economic climate.
Definitely, Janine.
The notes mature on August 3, 2027, and wereissued with a coupon of the Canadian Overnight
Repo Rate Average plus 90 basis points.
(04:07):
The demand was so high that the final orderbook reached 605.6 million Canadian dollars,
allowing the bank to increase the issuance sizefrom the original 200 million Canadian dollars.
It's quite remarkable, Steve.
David Wilkes, the vice president and head offinance at Equitable Bank, mentioned that this
issuance provides a "competitively pricedsource of funding" that will further strengthen
(04:32):
the bank’s capacity to innovate and delivervalue to their investors.
It's a testament to their leadership andstrategic direction.
And it's also worth noting that the issuanceled to a favorable repricing of their secondary
curve, achieving the tightest spread on recordfor a comparable term.
This is a clear indicator of the bank's solidfinancial footing and the market's confidence
(04:54):
in their operations.
Yes, and while these notes are not eligible forCanada Deposit Insurance Corporation insurance,
they rank equally with all of the bank’s otherunsecured and unsubordinated liabilities.
This move is backed by a group of financialinstitutions, including BMO Capital Markets,
CIBC Capital Markets, National Bank FinancialMarkets, and Scotiabank as joint leads and
(05:18):
bookrunners, with RBC Capital Markets and TDSecurities supporting as co-managers.
The Bank of Canada’s Financial Stability Reportalso highlighted that the financial system
began the year with increased resilience, whichis a positive sign.
However, it also cautioned about challengesfrom global trade conflicts that could have
(05:39):
economic repercussions.
Despite these challenges, the fixed-income andcore funding markets have remained stable,
providing a conducive environment for bankslike Equitable to raise capital.
It's an interesting time, Steve.
As of the end of April 2025, Equitable Bankheld 134 billion Canadian dollars in combined
(06:01):
assets under management and administration.
This substantial asset base, coupled with thefresh capital from the deposit note issuance,
positions them well to navigate the currenteconomic landscape and continue providing value
to their clients.
Indeed, Janine.
It's going to be interesting to see howEquitable Bank leverages this new funding to
(06:22):
further their growth and innovation in thecoming years.
That wraps up our discussion for today.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
estate.
Before you go, a quick reminder (06:39):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
homeownership goals. Catch you next time, and stay informed with the latest industry
(07:04):
insights!
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