TORONTO — Two of Canada’s largest banks increased their fixed-rate mortgage rates amid rising yields on the bond market and a strengthening economy.
The Royal Bank of Canada says its posted five-year fixed mortgage rate moved to 5.14 per cent Thursday, up from 4.99 per cent.
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The bank’s special offer rate for a five-year fixed mortgage with a 25-year amortization moved to 3.54 per cent from 3.39 per cent.
RBC (TSX:RY) says the changes reflect the activity of competitors, costs for funds on the wholesale markets as well as other costs and market considerations.
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Toronto-Dominion Bank (TSX:TD) followed suit on Friday, raising its five-year fixed rate to 5.14 per cent, the first time it has been above five per cent since February 2014.
Scotiabank (TSX:BNS) says it is reviewing its rates and will likely soon make changes.
Yields on the bond market, where the big banks raise money, have been on the rise since late last year.
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Many economists are also predicting that the Bank of Canada may raise its key interest rate target next week, a move that would likely prompt the big banks to raise their prime rates.
Increases in the prime rates push up the cost of variable-rate mortgages and other loans such as home equity lines of credit that are tied to the benchmark rate.