Pamela Vasiliu
Sales Representative
pvasiliu@remax.net

RE/MAX Professionals Inc.
Brokerage
Independently owned and operated.

Date: Tuesday November the 21st, 2017 
416-236-1241

 

   

RBC to Hike Mortgage Rates Starting Friday

January 6, 2016 - Updated: January 6, 2016

Royal Bank of Canada says its special offer five-year fixed mortgage goes up one-tenth of a point to 3.04%. RBC is also raising the rate for a variable five-year mortgage by 0.15 per cent, starting Jan. 8.

Starting Friday, the bank said it planned to increase rates on fixed mortgages of between 2 and 5 years by 10 basis points. (A basis point is 1/100th of a percentage point.) RBC’s five-year variable rate will increase by 15 basis points.

The move reflects RBC’s discounted rate specials given to customers who qualify, and pushes its five-year fixed rate up to 3.04%. No announcements from other canandian major banks on matching rate increases on Tuesday. Lenders often closely follow each other in changing mortgage rates. 

RBC’s decision to increase rates was influenced by federal regulators last month, in an effort to normalize soaring home prices in cities such as Toronto and Vancouver, including hikes to minimum down payment rules, higher costs to lenders who securitize and sell their federally insured mortgages and a proposal by the Office of the Superintendent of Financial Institutions to require banks to hold more capital against some mortgages.

The changes “reflect a number of factors (beyond the bond yield), including changes in market conditions driving increased short-term funding costs and long term/wholesale funding costs.” Funding costs to mortgage lenders have increased in recent months amid intense competition for deposits and from investors who have started demanding greater risk premiums for bank debt.

Royal Bank of Canada says its special offer five-year fixed mortgage goes up one-tenth of a point to 3.04 per cent.

It noted that the changes don’t apply to its posted mortgage rates, which are typically higher than special offer rates.

Several other special offer mortgage rates from RBC will also rise by 0.10 per cent on Friday but the amount of annual interest charged will depend on whether the term is two, three or four years.

RBC is also raising the rate for a variable five-year mortgage by 0.15 per cent, starting Jan. 8.

 

 


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