RBC Raises Rates
Royal Bank announced Monday it is increasing several mortgage rates by up to six-tenths of a percentage point.
The biggest jump is attached to the popular five-year fixed closed rate, which moves from 5.25 per cent to 5.85 per cent. That\\\'s the posted rate, which like all of the big banks, RBC discounts. Its new discounted rate for the five-year term also rises six-tenths of a percentage point to 4.59 per cent.
Royal Bank has also raised its three-year and four-year fixed closed rates. The posted three-year rate climbs one fifth of a percentage point to 4.35 per cent, while the posted four-year rate jumps two-fifths of a percentage point to 5.34 per cent.
Other banks are expected to follow suit. The new rates are effective Tuesday.
Variable mortgage rates, which rise in tandem with the Bank of Canada\\\'s key overnight lending rate, are unchanged. But they are likely to be heading up soon too.
Bank of Canada governor Mark Carney warned last week that inflation was higher than expected. That had some market watchers forecasting that the central bank could move to raise its key lending rate as early as June. The key rate has been at a rock-bottom 0.25 per cent since April 2009 to help the economy recover.
Fixed-rate mortgage rates tend to move higher when long-term bond yields rise.
A survey released last week by RBC found almost two-thirds of respondents expected the cost of servicing a mortgage to rise this week.
Source: CBC
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