TD Canada Trust announced today that its raising interest rates on its 3 and 5 year fixed term mortgages. This announcement comes on the heels of a similar RBC announcement earlier this week. RBC is increasing its 3 and 5 year fixed mortgage rates by 0.20% as well as its deep discounted 5 year fixed mortgage rate from 3.49% to 3.69%. TD made similar changes to it’s 3 year fixed mortgage rates. By contrast TD is leaving it’s 5 year fixed mortgage rate untouched but is increasing it’s best discounted 5 year fixed mortgage rate by 0.10% to 3.39%.
Increased bond yields are the culprit behind the mortgage rate increases. As investors gain confidence in European stability they shift away their reliance on Canada’s bond market. If bond yields maintain their current levels then other lenders will undoubtedly follow with mortgage rate increases of their own.
These modest mortgage rate increases would not normally be significant to the Canadian real estate market, but given the current market softening it may be the straw that breaks the camel’s back.