Monday and Tuesday (March 29/30, 2010) saw the RBC, TD Canada Trust, CIBC, National Bank and Scotia Bank all raised their 3, 4 and 5 year closed mortgages by 20, 40 and 60 basic poiints.
Queens University business professor, Louis Gagnon, states that interest rates have no where to go but up. The increases may result in a cooling of Canada's current hot real estate market.
Economicsts say that the fairly aggressive rate hikes are in response to the rallying bond market and suggestions by the Bank of Canada that its overnight lending rate could rise sooner than expected. Inflation is growing quicker than expected and the central banks pledge to keep interest rates low has been conditional on core inflation hovering around or below the 2% mark.
Since 2000, the lowest overnight bank rate has been .25% (today's rate) and the highest has been 5.75% (January 2001). The average rate since 2000 was 3.16%. The bank prime rate usually runs about 2% above the overnight bank rate.