RBC Raises Mortgage Rates

Rising bond yields have put upward pressure on fixed mortgage rates for the past few weeks and RBC was this first to flinch.  As of today RBC increased its 1 year mortgage rate by .14% to 3.14%; it’s 2 year mortgage rate by .1% to 3.14%; it’s 3 year mortgage rate by .1% to 3.65%; it’s 4 year mortgage rate by 0.1% to 3.09%; and most notably it’s 5 year fixed mortgage rate by .2% to 3.29%.

This mortgage rate increases have largely been anticipated by market watchers noting that the banks could only withstand compressed margins for so long.  The 5 year Government of Canada Benchmark bond yield hit 1.56% on Friday, it’s highest level of the year and .2% higher than the average for the same period.  The RBC increase of .2% matches the bond yield increase and relieves any upward pressure on rates for now.

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