TD, RBC follow other banks in hiking mortgage rates

TD Bank has joined the rest of Canada's big banks in hiking mortgage rates.

Its special five-year rate increased to 3.79 per cent on Thursday, up 10 basis points from 3.69, with the closed five-year rate now at 5.14 per cent.

On Wednesday, the Royal Bank said it is increasing several of its residential mortgage rates, including fix posted rates as well as special-offer rates. It was following Bank of Montreal which raised some of its mortgage rates Tuesday.

For the most part, Canada's largest bank is increasing the rates by 20 basis points, with its fixed five-year closed mortgage rising to 5.34 per cent and its five-year special rate to 3.89 per cent.

The rate changes are effective Thursday.

Other rates rising 0.2 percentage points include the bank's posted three- and four-year closed rates to 3.95 per cent and 4.74 per cent, respectively.

Royal's special offer four-year closed rate also goes up 20 basis points to 3.59 per cent, its seven-year special offer closed rate by 20 basis points to 4.19 per cent and its 10-year special offer closed rate to by 30 basis points to 4.59 per cent.

The five-year fixed closed rate and the five-year special fixed closed rate are now both 3.79 per cent.

Homeowners' monthly costs will rise

Laurentian Bank has also raised its rates, announcing on Wednesday 20-basis point boosts to its three-year, four-year and five-year fixed rates.

The rates are now 3.95 per cent, 4.74 per cent and 5.34 per cent, respectively.

Rising rates push up the average monthly costs faced by homeowners. A rise of 20 basis points means an increase in mortgage payments of $60 to $100 a month on a mortgage of $500,000. That's money homeowners won't have to put into other spending, including cars and home improvement.

In the past five months, banks have increased interest rates by more than a third.

With many Canadians carrying a heavy debt load, rising mortgage rates can make housing less affordable for some families.

Yesterday, Finance Minister Jim Flaherty said he does not plan to intervene in the housing market and believes Ottawa has taken the steps necessary to calm overheated prices.

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Jonathan Jones

Jonathan Jones

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CENTURY 21 In Town Realty
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