Big Banks Start Increase in Mortgage Rates

Monday saw an announcement from 3 of Canada’s big banks to suddenly raise their mortgage rates by up to .6%. Royal Bank of Canada, TD Canada, and Laurentian Bank made changes to their closed mortgages of three, four and five year terms that came in affect as of today. This will see an increase of about 1.5% within a year to finance a home. This was bound to happen sooner or later as the rates were already very low. This will become a trend as the other banks will follow suit to these sudden changes. Variable rates did not change but everyone is predicting that they will increase sometime this year which will be influenced by the Bank of Canada. The low lending rate was suppose to help stimulate the economy but we have seen many indications that the economy is steaming along including the real estate market and in order to cope with inflation these rates are bound to go up. The only thing that confuses me about this sudden change in mortgage rates is that just last week we saw a slight drop in the rates which is nothing really to spend your time thinking about. One thing I will anticipate in the next few months, for those that locked in a rate hold and the combination of spring and an increase in consumer confidence, it’s going to be a busy real estate market.