RBC has sharply turned the rudder on mortgage rates.
At 8:00am ET, it hiked its posted 5-year fixed rate 6/10 of a percentage point, to 5.85%.
That’s the biggest one-day jump in posted rates since 1996.
TD followed shortly thereafter, and other banks are probably not far behind.
“The rates are tied to our funding costs, which change day to day,” said an RBC spokesperson. “Our long-term funding cost has gone up significantly since December.” (Globe story)
Both banks also raised three and four-year rates, by 0.20 and 0.40 percentage points respectively.
5-year bond yields (which drive fixed mortgage rates) are now sitting at 2.90%, a 17-month high.
What this means to you:
If you need a pre-approval, get your application in fast.
Expect delays in pre-approvals due to increased application volumes
If you’re a broker floating rates for your clients, consider locking them in.
If this 5.85% posted 5-year rate holds until April 19, that will be the new qualifying rate for variables and 1- to 4-year fixed terms.
If your closing date is over 120 days, but within six months, consider a 6-month rate hold through a National Bank-approved broker.
If you don’t have time to submit a full application, you can lock in a 3.89% 120-day rate hold at ING. Once you’re ready to close, your mortgage planner can then process the application for you, and sometimes provide a better rate.