The traditional #1 pacesetter in mortgage rates is slowing the rate party. RBC is raising three core rates, including its:
These changes take effect Thursday, March 29.
And that date is not coincidental. It’s the day after BMO’s 2.99% 5-year rate ends. It’s also around the time when various competitors’ rate offers expire.
Barring a material drop in bond yields, RBC’s move could motivate other lenders to lift their own fixed rates.
It might also create a sense of urgency in borrowers to lock into long-term mortgages. That’s a side effect lenders would welcome.
As long as the 5-year yield keeps under 1.75%, however, there should be a few lenders left in the low 3% range on 5-year mortgages.
Rob McLister, CMT
Does the raising of posted variable means that they expect BoC to keep or reduce the rate ?
I hope so :)
Canada’s mortgage wars coming to an end? Appears the banks are waving the white flag http://business.financialpost.com/2012/03/26/clock-is-ticking-on-canadas-mortgage-wars/
The CPI/core-CPI saw 3 consecutive months of increases, if anything Carney will be facing pressure to Increase prime rate, not decrease it, in the near future.
The “mortgage war” is ending because bank’s funding costs had gone up due to the up-trending (5-year) CDN bond yields. But which direction will the bond yield take in the future…that’s up for debate…
Really, then why is U.S. inflation currently higher than Canada and yet the U.S. fed has gone on record saying their rock bottom bank rate will likely stay till late 2014?
BofC cannot at this time afford to break away from the U.S. status quo. Any increased rate action on the part of BofC would result in a new C$ rally. Not something our already above par C$ and fragile economic recovery needs at this time.
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