CIBC analyst, poll suggests little impact of any rate cut
Bank of Canada governor Stephen Poloz will announce the bank’s decision on interest rates at 10am ET Wednesday but one economist says that it won’t make much difference to mortgage rates. Meanwhile a poll of consumers suggests it won’t spur widespread increases in borrowing. Robert Sedran from CIBC World Markets says that even if the central bank makes a cut of 25 basis points (0.25 per cent) the major mortgage lenders may pass on less than half of that to borrowers. He believes the cut to prime bank rates will be 10 basis points (0.10 per cent) which would make little difference to monthly mortgage repayments.

Meanwhile a CIBC poll taken a few days ago reveals that 93 per cent of respondents will not increase their borrowing if there is a cut in interest rates. Of those a third said that they would use lower rates to accelerate debt repayments while 60 per cent said there would be no impact on their borrowing. Just 7 per cent would consider borrowing more. Those in Atlantic Canada, Manitoba and Saskatchewan are the most likely to pay down debt faster if interest rates are cut.
Confidence index continues to slide
The weekly poll of Canadian consumer confidence has dipped again for the week ending July 10. The figures from Bloomberg and Nanos Research show an index reading of 56.13, down from 56.61 a week earlier but still above the 55.77 average for 2015 so far. Positive responses on job security and personal finances increased in the week while those on the economy and real estate prices declined. Those who think home prices will be higher in 6 months made up 37.25 per cent, down from 37.97 per cent in the week earlier. The largest percentage (45.46) believe they will stay the same. The largest drop in economic mood was in Ontario. Sentiment was largely flat or slightly lower across all age groups and among both renters and homebuyers.
US mortgage banking revenue dips for Wells Fargo
The largest mortgage lender south of the border posted financial results Wednesday and showed that mortgage profit is harder to come by. Wells Fargo’s overall profit was little changed in the second quarter of 2015 but its net interest margin showed that profitability of lending dipped to 2.95 per cent from 2.97 per cent in the previous quarter. Revenues from mortgage lending were down 1 per cent to U$1.71 billion although originations were up to $62 billion from $47 billion in the first quarter. The mortgage market overall in the US is growing with $378 billion in home loans originated in the second quarter, a growth of 21 per cent from the previous quarter and 27 per cent higher than a year earlier.
Scotiabank expands global footprint
Scotiabank has announced that it has reached an agreement to acquire the retail and commercial banking operations of Citigroup in Panama and Costa Rica. The move will increase the bank and mortgage lender’s business in the country, tripling its customer base and giving it a number two market position for credit cards. 

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate