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TD & RBC Sharpen Their Public 5-Year Rates

Cut-Mortgage-RatesWe could be in for a slow summer in the mortgage market, thanks to housing moderation and mortgage rule tightening over the last 12 months. This may have contributed to TD’s and RBC’s decisions this week to chop their advertised 5-year fixed rates.

Those rates are now down to 3.09% — the lowest we’ve ever seen posted on their websites. They’re also just 10 basis points above the 2.99% mark, a level that raised the hackles of Finance Minister Jim Flaherty in March.

RBC, the nation’s biggest mortgage lender, and TD have rarely been this aggressive on public mortgage pricing. Like most big banks, they usually do most of their discounting behind the scenes with “discretionary rates.” But consumers have never been so rate sensitive, so both lenders want to appear like they’re in the game (which they are).

RBC’s 3.09% offer “expires” June 30 but it can be extended or withdrawn at any time. RBC also has new 4-, 7- and 10-year rate “specials“. TD doesn’t post expiration dates for its specials, but they too can change at any time.

Pricing aside, RBC continues to make veiled references to the limitations of BMO’s 3.09% “Low Rate” product…in ads like this…


BMO has led the Big 6 on advertised 5-year fixed pricing for three years now. The other banks are finally getting motivated enough (in the face of flagging mortgage volumes) to match BMO.

Now we’ll watch to see if BMO responds by advertising its own fully-featured 5-year mortgage at the same 3.09% rate.

(Note: All the banks have been selling 5-year rates well below 2.99% for weeks already — through their branches and mobile sales forces. They just haven’t advertised low rates as conspicuously as they are now, on a national basis.)

Rob McLister, CMT