RBC has dropped most of its fixed rates another 10 basis points—just one week after its last rate cut.
It did so without issuing a press release. (For whatever reason, sometimes RBC likes the publicity and sometimes it doesn’t.)
RBC’s posted 5-year fixed rate is now 5.79%, versus 5.89% last week.
It’s 5-year fixed “special offer” rate has dropped to 4.39%.
The other banks will probably match RBC’s reductions next week. The Big 5 has taken a lot of heat lately for keeping rates high while funding costs have plunged.
Update July 5: BMO has matched RBC's rate cut.
Wow… mighty generous of them… lol
My loan shark is offering better rates…
funding costs have decreased for the past 5 months – look at the 5-year Government of Canada benchmark yields – 2.32%…with a mortgage rate of 4.89%, thats a massive 2.57% interest spread or more than 100% (2.57/2.32) profit margin… you can check the historically spread on my blog for variable and fixed mortgage rates…
Thanks, this is the kind of value-added info that makes this site a really great resource.
I was pretty set on closing in late august with a 5 yr var. mortgage. but with Variable rates increasing and fixed rates decreasing its seems fixed rates may be worth a second look
are variable rates decreasing? it is my understanding that you can still get a Prime less 0.5% variable.
but with prime increase, the rate on a var is increasing…
Lenders’ discounts to prime have been improving, but prime itself is in a rate increase cycle.
Prime will rise faster (and more) than the discounts to prime improve. As a result, variable rates are expected to increase in the next year or two.
Any reason the qualifying rate is 5.89% while most major banks have their posted rate at 5.79%? Does it depend on all six of the banks having the same rate, or if four or five out of six have a certain rate is that enough?
The qualifying rate is established every Monday.
It is based on the Bank of Canada’s posted 5-year fixed rate (which is set the previous Wednesday).
In this case, the BoC last updated its posted rate on June 30, prior to the latest 10 bps reduction by the banks.
The BoC will update its posted rate tonight to 5.79%.
In turn, we have to wait until Monday for the qualifying rate to change to 5.79%.
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