Flaherty warns of even higher mortgage rates

OTTAWA - Interest rates are going up, and the federal finance minister says he expects them to rise even more.

The Royal Bank increased several of its posted and special mortgage rates on Tuesday, joining TD Bank and CIBC.

All three banks have increased the posted rate for a five-year closed mortgage by a quarter of a percentage point, to 5.44 per cent.

RBC also raised its special fixed rate offer for a five-year closed mortgage by the same percentage amount, to 4.39 per cent.

Finance Minister Jim Flaherty said he's not surprised.

"The recent increase by a couple of the banks is exactly what we expected," Flaherty told reporters in the foyer of the House of Commons.

And more increases should be coming, Flaherty predicted, since lending rates have been hovering close to historic lows.

"We're likely to see higher interest rates as we go forward because interest rates are still very low."

Stephen Hall

Stephen Hall

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CENTURY 21 Seller's Choice Inc.
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