The fallout from the collapse of Silvergate Bank, Silicon Valley Bank, 

Signature Bank and Credit Suisse have spread to the Canadian mortgage market, with some forecasters now expecting the Bank of Canada to cut interest rates sooner than previously thought.

We are also starting to see Canadian banks discount their mortgages — especially on fixed rates — in response to last week’s plunge in bond yields stemming from fears about systemic financial risk in the U.S. and Europe.

As of Monday, March 20, 2023, we started to see mortgage providers cut fixed mortgage rates, some by as much as 60 basis points (bps), or 0.60%. That follows a roughly 70-bps plummet in 2- and 5-year Government of Canada bond yields (which typically lead fixed mortgage rates) in just a two-week period. We recently helped a client save over $22,000 on her mortgage by renegotiating her mortgage rate for her.

Reach out to us, and let us help you restructure your financing to help lower your interest rates and payments while the low rates are available.

What would happen if a Canadian bank failed?

First of all, it’s extremely unlikely that a Canadian bank would become insolvent. They’re closely regulated to make sure they have enough money on hand and that their balance sheets are healthy. But in the event that it happened, the Canadian-created the Canada Deposit Insurance Corporation (CDIC) to provide insurance. Canadian bank accounts are generally eligible for insurance up to $100,000 at each member institution for each category.