CMB Spreads Back to Normal
That’s significant because, like government of Canada (GoC) bonds, CMBs are supposed to be backed by the government and risk-free.
Things are much better now. Investors are no longer jittery about Canada’s real estate and credit markets like they were 11-12 months ago. In turn, CMB spreads have shrunk back to a 21-basis point GoC premium (much more normal).
That, of course, is welcome news to the mortgage market. Not only are smaller CMB-bond spreads a sign of recovery, but they usually signify improving mortgage rates—particularly with non-deposit-taking lenders who rely heavily on the CMB for funding.
Robert W May is a Real Estate Broker in Lethbridge Alberta, having now been in the industry for over 23 years. . He was also a licensed Lethbridge mortgage broker and financing expert with Canada First Mortgage of Calgary Alberta for the past 10 years. He is an industry leader always willing to help train and educate others in how to improve their business models for financial and personal benefit.