2022 – Year in review

By: ameer@trustedteam.com

As we turn the page on yet another tumultuous year headlined by rising interest rates and falling home prices, we wanted to take a look back at some of the top mortgage-related stories of 2022 and how mortgage rates fared.

Consumers grappled with rising prices in all nearly all aspects of the economy thanks to soaring inflation. But new homebuyers did get a reprieve when it came to Canadian real estate prices, which fell after reaching an all-time high earlier in the year. As of November, the average unadjusted price fell to $632,802, down 12% year-over-year and 22.5% below February’s price peak. 

On the other hand, borrowers had to deal with soaring interest rates, which slowed mortgage borrowing as non-mortgage debt grew.

Here’s an overview of some of the year’s top themes, rate movements and mortgage-related stock performance.

Top mortgage stories of 2022

  • Bank of Canada undergoes historic rate-tightening (Story)
  • Home prices ease from their peaks (Story)
  • Affordability becomes a big hurdle for new buyers (Story)
  • Controlling inflation became the Bank of Canada’s #1 priority (Story)
  • Tens of thousands of variable-rate borrowers reach their trigger points (Story)
  • Mortgage credit growth slows (Story)
  • CMHC updates its First-Time Home Buyer Incentive amid falling prices (Story)

Top deals & lender moves of 2022

  • RBC makes a $13.5-billion bid for HSBC Canada (Story)
  • First National co-founder offers to buy Home Capital (Story)
  • Rocket Mortgage comes to Canada (Story)
  • Equitable acquires Concentra Bank (Story)
  • TMG joins forces with Planipret, Quebec’s largest independent brokerage (Story)
  • National Bank’s broker push expands throughout Ontario (Story)

Rate Movements

The foundation for variable interest rates is the Bank of Canada’s overnight rate and prime rate, which both finished the year 400 basis points higher than where they began.

Meanwhile, the most important benchmark for fixed-rate pricingthe 5-year government bondended the year up over 200 basis points, which resulted in significantly higher fixed mortgage rates by year-end.

Indicator Year end 2022
BoC overnight rate 4.25% +400 bps
Prime rate 6.45% +400 bps
Avg. 5-yr fixed rate on new insured mortgages1 4.79% +227 bps
Avg. variable rate on new insured mortgages1 5.35% +388 bps
5-yr Posted Rate 6.49% +170 bps
Min. Qualifying Rate (MQR)
5.25% No change
5-yr government bond yield 3.42% +217 bps

Stock moves

And finally, here’s a look at the performance of Canada’s big banks and public companies that make the majority of their revenue in the mortgage business.

1 Source: Bank of Canada via Statistics Canada, as of October 2022.

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