The nation’s largest mortgage lender is lifting some of its fixed rates.
RBC’s “Special Offer” 5-year fixed will rise 20 bps to 3.69%, effective tomorrow.
By contrast, the average deep discounted 5-year rate is now around 3.09-3.19% industry-wide.
RBC’s posted 5-year rate remains unchanged at 5.24%. Posted rates have generally hovered around 5.24% since May.
The bank’s 3-year posted rate is also rising by 20 bps.
These changes follow a 40 basis point jump in the 5-year bond yield, from its lows in July. (Bond yields usually guide fixed-rate mortgage pricing, except during unusual times—like periods of global financial risk.)
Apart from these and other recent rate increases, the next wave of fixed-rate hikes will likely not arrive unless 5-year yields break above the 1.60% mark. This chart will help you follow the bond market, if you’re interested.
Rob McLister, CMT
Interestingly, to-day another bank lowered its 5 year fixed 30 day close to 2.99%
perhaps RBCs sees the writing on the wall with the housing market set to collapse and doesn’t want to write any new business
RBC’s rate is going up to 3.39% from 3.19%… I would know, I’m a MS for RBC. 3.69% is a little crazy!
Which bank is that?
Or perhaps its funding costs are simply going up Mr. Fear Monger.
Read RBC’s press release. It says:
Special Offer Rates*
Five-year closed
3.69 per cent
(increased by 0.20 per cent)
http://www.theglobeandmail.com/globe-investor/rbc-boosts-mortgage-rates/article4490037/
Here it is. RBC’s Rates have gone up.
Too bad they didn’t fill their own staff in before they told the public!
Ladies and Gentlemen! It’s all about maintaining and increasing profits. The customers, and everyone else are just tools to create that profit. Nothing more. It’s the shareholders that count. Everything else is secondary. Welcome to the new normal.
3.09% is still available from RBC, the avertisd special is 3.69%. Contact a mortgage specialist for more info. RBC won’t price themselves out of the marketplace, but will be prudent in their pricing and not underprice their products. Funny how the big 6 banks didn’t wad too far into the 2.xx% war and the bond market bounced back to them.
?
There’s a lot of volatility in the markets right now. When people retreat to safety, I think that we could still see some even lower bond yields. Here’s another blog with some interesting arguments:
http://www.movesmartly.com/2012/08/monday-morning-interest-rate-update-august-13-2012.html#more
As for the overnight rate, inflation is low and our dollar is high. It’s a conundrum that the BoC cannot address with their current mandate.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/its-time-to-broaden-bank-of-canadas-mandate/article4491186/
This makes me anxious because Flaherty appears quite restless… and he doesn’t have the best track record.
collusion maybe?
It seems like anytime recessions are mentioned, the 1981 & 1990 rates are always brought up. But at that time the boomers were really fueling our economy.
Why doesn’t anyone go back further? BoC rates hovered around 2% from 1935 to 1955. Was it simply population growth that finally got the economy going?
Now the boomers are reducing their spending (retiring with fixed incomes) and we’re not having as many kids. We could see low rates for a very long time.
calm down, the rates will go back down next week
as an ex RBC MS myself what they post as their special rate and what they can actually give are two different things. they get full commission if they stay to the high side of RVR and the commission gets greatly reduced for every 10bp they have to go under that. so MS takes the hit not the bank.
I have been following this site for a long time and the knowledge I have gained helped me negotiate a great rate with my bank. We just locked in for 5 years at 2.89%. Thank you Melanie & Rob McLister for posting such great information.
RBC also is increasing the HELOC rate from Prime to P +.5 effective Oct 1 for long term Homeline customers whose LOC portion was originally at Prime.
gee, rbc the first to goose mortgage rates…what a surprise…who knew?
I heard that RBC already sent out an announcement like this earlier in the year.
Did you hear about the Meridian Credit Unions new advertised rate of 2.85%? That’s ultra Low !
That 2.85% is a variable rate and it’s not that good.
It’s certainly our pleasure. Glad the info proved useful! Cheers….Rob