Hike in RBC Mortgage Rate Are Bad News For Canadian Borrowers and Facing ‘Stress Test’
TORONTO — Two of the biggest banks of Canada are raising all of their benchmark rates for 5 year, fixed-rate mortgages price.
According to TD Bank, as of Wednesday this bank increased its rate for the 5 year fixed mortgages from 5.14% to 5.59%.
Robert McLister, Rate Comparison Website Founder and Mortgage planner said that this increase is very “unusual”, as benchmark rate hasn’t jump of around 45 basis points or more that that since March, 2010.
Julie Bellissimo, TD spokeswoman said that there are number of factors which are considered when mortgage rates include managing risk, cost of lending and competitive landscape.
Meanwhile, AJ Goodman, Royal Bank spokesman said that lender plans raised its posted rate for 5 year fixed mortgage on Monday to nearly 5.34% ad compared to 5.14% that have been posted currently.
McLister said that actual bank rates are not seeing increase for borrowers, but notes that Bank of Canada uses posted rates at big banks to calculate rate which is used in stress tests just to determine whether the home buyers are qualify for loans.