Mortgage Rates Soon Will Rise: RBC & TD

This article appeared on on July 4th, 2011.

RBC Royal Bank and TD Canada Trust said Monday they will raise their benchmark five-year fixed-rate mortgage 15 basis points, to 5.54%.

Other banks are expected to follow suit, since the hike reflects rising bond returns in the wider market, which lift the costs of funds for all lenders.

Despite Monday’s news, mortgage rates are still lower than they were just three months ago, and way below historical norms. And lower promotional rates are available at most lenders, including RBC and TD.

Bank of Canada Governor Mark Carney has held the key interest rate at 1% since last September, after lifting it from a rock-bottom 0.25%. The next rate decision is due out July 19, though most economists now expect the central bank won’t resume rate increases until at least September.

Anyone hoping to buy a home with the help of Canada’s largest bank has until the end of Monday to get the best possible rate.