It was always going to happen, but while last week the big lenders were reluctant to pass on the Bank of Canada’s interest rate cut to borrowers, this week there’s talk of a price war. Royal Bank of Canada is the first of the big banks to cut mortgage rates, dropping its five-year fixed rate deal to 2.84 per cent and also cutting its other fixed products. Flexible rates are unchanged though along with other lending from the bank. Of course, these rates are the bank’s published deals and brokers frequently secure better ones, but a ‘battle of the rates’ creating headlines can only help the perception that now is a great time to buy. How low those rates go is anybody’s guess, but there are already predictions of sub-two per cent mortgages.