Royal Bank, TD and CIBC raise their fixed 5-year mortgage rates
Other major banks expected to follow, as bond interest rates rise, increasing lending costs
Three of Canada's biggest banks have hiked the rate on their benchmark five-year mortgage, and more are expected to follow suit.
The Royal Bank of Canada raised its posted rate for a five-year, fixed-rate mortgage by 15 points to 5.14 per cent, the bank confirmed to CBC News in an email.
Shortly after, Toronto-Dominion Bank did the same, matching Royal Bank's new rate.
Interest rates are about to go up in Canada — no, for real this time
Canada's other three major banks — Scotiabank, Bank of Montreal, and CIBC — have yet to match the two leaders, but they are expected to soon based on what's happening in the bond market. CIBC's five-year posted rate had been 4.89 per cent, just below that of its rivals. When Royal Bank and TD moved to 5.14, CIBC hiked its five-year rate to 4.99.
Scotiabank says it is reviewing its rates and will likely soon make changes.
Banks finance their mortgages via a variety of sources, but the main one is by selling bonds, which they use to raise funds and then lend that money out to home buyers and other borrowers.
Rates in the bond market have been inching steadily higher, which raises the banks' cost of doing business.
The annual yield on a five-year bond from the Canadian government briefly topped two per cent this week, the first time it's been that high since 2013. Two-year government bond yields also spiked to 1.8 per cent, their highest level since 2011.
Royal Bank, TD and CIBC raise their fixed 5-year mortgage rates | CBC News
About half the mortgages I think are due to be renewed in 2018
Anyhow take a look at the graph and you can extrapolate what the interest rate will be at the start of the next crash, that is already starting.
While that is the US fed its representative of the current situation in canada. I'm thinking about 2% prime should do it. So if the actual mortgage rate gets 5ish point something and above...
Other major banks expected to follow, as bond interest rates rise, increasing lending costs
Three of Canada's biggest banks have hiked the rate on their benchmark five-year mortgage, and more are expected to follow suit.
The Royal Bank of Canada raised its posted rate for a five-year, fixed-rate mortgage by 15 points to 5.14 per cent, the bank confirmed to CBC News in an email.
Shortly after, Toronto-Dominion Bank did the same, matching Royal Bank's new rate.
Interest rates are about to go up in Canada — no, for real this time
Canada's other three major banks — Scotiabank, Bank of Montreal, and CIBC — have yet to match the two leaders, but they are expected to soon based on what's happening in the bond market. CIBC's five-year posted rate had been 4.89 per cent, just below that of its rivals. When Royal Bank and TD moved to 5.14, CIBC hiked its five-year rate to 4.99.
Scotiabank says it is reviewing its rates and will likely soon make changes.
Banks finance their mortgages via a variety of sources, but the main one is by selling bonds, which they use to raise funds and then lend that money out to home buyers and other borrowers.
Rates in the bond market have been inching steadily higher, which raises the banks' cost of doing business.
The annual yield on a five-year bond from the Canadian government briefly topped two per cent this week, the first time it's been that high since 2013. Two-year government bond yields also spiked to 1.8 per cent, their highest level since 2011.
Royal Bank, TD and CIBC raise their fixed 5-year mortgage rates | CBC News
About half the mortgages I think are due to be renewed in 2018
Anyhow take a look at the graph and you can extrapolate what the interest rate will be at the start of the next crash, that is already starting.
While that is the US fed its representative of the current situation in canada. I'm thinking about 2% prime should do it. So if the actual mortgage rate gets 5ish point something and above...
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