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TD-Canada-Trust-BankAfter cutting advertised rates last week, TD Canada Trust has followed RBC’s lead in lifting rates back up.

Like RBC, TD is raising its advertised:

  • 4-year fixed
    …by 10 bps to 3.09%
  • 5-year fixed
    …by 20 bps to 3.29%

These changes take effect Tuesday, June 11. And if history is a guide, they’ll likely be matched by most other major banks.

These hikes are being prompted by rocketing bond yields. The 5-year yield soared to a 13-month high on Monday, closing at 1.63%. That’s a climb of almost 1/2 percentage point in just over a month. This raises lenders’ fixed-rate funding costs materially, compelling them to pass along higher rates to borrowers.

Neither RBC nor TD announced any changes to their 5-year posted rates. As a result, the benchmark qualification rate may stay as-is. (The benchmark rate, currently 5.14%, is used to qualify borrowers for variable rates and 1- to 4-year fixed terms. The higher it goes, the harder it is to get approved—at least for folks with tight debt ratios.)

At the moment, there are still sub-3% five-year fixed rates available for live deals (i.e., deals with firm closing dates). But pre-approvals below 3% are getting tougher to find by the day.


Rob McLister, CMT

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