Banks to increase mortgage rates -

Banks to increase mortgage rates

Will central bank follow trend?


In April 2009, the Bank of Canada rushed to aid an ailing economy, fixing its key lending rate at a paltry 0.25 per cent. Since then, the economy has indeed begun to recover, and the stock market has rallied. But don’t get too comfortable. On Monday, Royal Bank and TD Canada Trust announced that they will increase several mortgage rates by up to .6 per cent; the new rates go into effect on Tuesday. This will be the first time since last October that Canadian mortgage rates have been hiked. And more banks are expected to follow suit. All this has forecasters predicting that the central bank will move up its key lending rate as soon as this summer. Mark Carney, Bank of Canada’s governor, warned just last week that Canada’s inflation rate was higher than anticipated.

CBC News

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Banks to increase mortgage rates

  1. How nice. Why wait for the BoC when you can raise rates now and make even more money.

    Usury used to be a sin.

    • That's hardly usury. Look at credit card charges, LOL!

      The mortgate rate was overdue for an increase.

      • Usury used to mean any taking of interest. Getting more back for what you lent out, without putting any of your own work in.

        • It's still a sin for Muslims, so they just create more complex manners of extracting interest, such as a sukuk.

          Less than 6% is hardly outrageous for a mortgage though, and keep in mind that's the posted rates. You should still be able to get something in the low 4% range.

          • Oh, I'm not worried about that, personally. I'm mortgage free and land-holding. I just find it amazing that with personal bankruptcies up 25%, RBC profits up 35% on lower loan losses (perhaps because they've already foreclosed on those who were having trouble?) they have the stones to raise interest rates before the BoC to make even moreand expect there to be no public blowback from this.

            What's even more amazing is that they're probably right.

  2. The increase was described as ‘unwelcome but hardly surprising given that we’re in an upward rate cycle that is likely to continue for the foreseeable future.