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Desperate banks fearful of shrinking mortgage business are posting more competitive rates

Canadian banks are becoming increasingly worried about their shrinking mortgage business. With fewer people taking out mortgages due to high interest rates and economic uncertainty, banks are posting more competitive rates to attract customers. This move is a clear sign of desperation as they strive to maintain their market share and keep their mortgage business afloat.

In recent months, the housing market has slowed down significantly. Many potential homebuyers are hesitant to take on new mortgages, fearing financial instability. This has led to a noticeable drop in the number of new mortgage applications. To combat this, banks are lowering their rates, hoping to entice more customers to borrow and buy homes despite the challenging economic conditions.

The competitive rates being offered are not just for new homebuyers. Banks are also targeting existing homeowners who might be looking to refinance their mortgages. By offering lower rates, banks aim to persuade these homeowners to switch their mortgages, thereby boosting their mortgage portfolios. This strategy is essential for banks to remain profitable in a tough market.

However, experts warn that this tactic may not be enough to fully revive the mortgage market. While lower rates might attract some borrowers, the overall economic uncertainty and high property prices continue to deter many potential buyers. Banks will need to find additional ways to support their mortgage business and navigate these challenging times.



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