Banks drop fixed-rate mortgage costs

Three of Canada’s major banks lowered some fixed-rate mortgage costs this week and experts expect the other banks to follow suit.

RBC Royal Bank, TD Canada Trust and Canadian Imperial Bank of Commerce all lowered their four-, five-, seven- and 10-year fixed rates in response to lower bond market yields and Rob Mclister, editor of, says “the other banks shouldn’t be too far behind.

“The banks last hiked fixed rates on Feb. 7 when the five-year government bond yield was 2.71%. (Friday it was) down to 2.52%.”

The move to reduce the seven and 10-year rates was in response to uncertainties going forward, says Chris Wisniewski, an associate vice-president at TD Canada Trust.

“With talk of the possibility of interest rate increases in the future, more and more borrowers, especially first-time homebuyers, are considering locking into a longer term mortgage at a fixed interest rate,” says Wisniewski.

Savvy mortgage market watchers are keeping a close eye on inflation and the possibility of the Bank of Canada increasing its overnight rate in the next three months, which would increase the variable rate.

Some experts agree by the end of 2012, the overnight rate could increase as much as 2% from its current 1%, making fixed-term mortgages more attractive.

If you have mortgage questions, speak to a mortgage broker or your bank.

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Ali Abdalla

Ali Abdalla

CENTURY 21 Bravo Realty
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