Canadian Banks Raise Mortgage Interest Rates in April 2011

This article appeared on the Globe and Mail on April 4th, 2011.

Several of Canada’s big banks are raising most of their fixed-term mortgage rates ahead of the busy spring real estate market.

Toronto-Dominion Bank said the biggest increases will be for mortgages with terms of five to 10 years, which will all go up by 0.35 of a percentage point starting Tuesday.

The move was matched by Canadian Imperial Bank of Commerce.

Royal Bank of Canada raised its rates on mortgages for five and 10-year terms by 0.35 or a percentage point, and its seven-year rate by 0.15 of a percentage point.

The posted rate for five-year closed mortgages — one of the most popular types of loans for Canadian home owners — will rise to 5.69 per cent.

The three banks will also raise their rates on one-year, three-year and four-year terms by 0.2 of a percentage point while two-year terms go up 0.3 of a percentage point.

Fixed mortgage rates, which are closely tied to the bond market, tend to climb when traders shift investment activity to riskier equity assets from bonds, which are considered safer.