The other big banks moved to increase their fixed mortgage rates effective today, October 14, 2009, following RBC’s mortgage rates increase last week.

The fixed rate increases range from 0.10% – 0.35% while variable rates remained unchanged. The latest rates are now as follows:

Bank mortgage rate changes

Special rate offers

Scotiabank special offer

* The special discounted rates are not the posted rates of Scotiabank.
Rates are subject to change without notice. Offers may be withdrawn or
extended without notice and cannot be combined with any other rate
discounts, offers, or promotions. Mortgage funds must be advanced within
120 days of the application date. Other conditions may apply.

BMO Special offer

*This special discounted rate is not the posted rate of BMO Bank of
Montreal. Rate is subject to change without notice. Offer may be
withdrawn or extended without notice. Mortgage funds must be advanced
within 90 days of the application.

If you’ve been shopping around for a mortgage lately, you might’ve noticed that some offers from the country’s biggest banks are looking especially attractive, the Globe and Mail reported today.

Canadians have been handed a golden opportunity to snag mortgage rates at rock-bottom prices, but highly competitive lending is pushing overly optimistic opportunities on people who might not understand what they’re getting themselves into, suggest some members of the mortgage industry.

“The banks are coming out to try and be lucrative enough to pull clients in,” said Jeff Mayer, an agent at Mortgage Intelligence, a Toronto-area mortgage broker. “That being said, I still think everyone should be taking a step back and looking at what direction they should go in.”

Direction is something that a lot of Canadians could probably use these days when it comes to lenders, especially considering the lack of certainty that has engulfed the mortgage industry as of late.

Hardly a year ago, it seemed like a black cloud was gathering over lenders, with fears it would be impossible for some to even consider applying for a mortgage and worries they’d be shown the door before they’d even filled out the application.

Those concerns were pushed aside in a matter of months, and many Canadians in good financial standing can now secure very attractive rates. The question is, how was this shift possible in a recovering, yet still uncertain economy.

“It’s a knee-jerk reaction — Canadians are known for it,” Mr. Mayer explained of the lenders. “You’re going to see rates climb in the next three to four months, guaranteed.”

All of this talk about the interest rates climbing makes it especially unusual to see some banks drumming up attention for surprisingly low mortgage rates.

On Friday, Bank of Montreal (BMO-T54.02-0.29-0.53%) launched a promotional push for its five-year closed variable mortgage at 2.25 per cent, which it calls the “lowest rate in more than 30 years.”

“We think lower mortgage rates have played a key role in providing more affordability for home buyers, which has helped turn Canada’s housing market around from weaker levels earlier this year,” said Frank Techar, president of the bank’s personal and commercial banking division.

“We are trying to support our customers coming off of what we consider to be a pretty difficult year, in general for everyone.”

So far, the other Canadian banks haven’t moved to match BMO’s closed variable rate, though they’re offering other low and competitive rates on other types of mortgages.

“A year ago they (the banks) couldn’t do it because we were going through this huge credit crunch, so they had to cut the reins,” said Clay Gillespie, vice-president and portfolio manager at Rogers Group Financial in Vancouver. “Turns out our Canadian banks weathered the storm quite nicely, and we have a real estate market that’s still pretty vibrant.”

The banks have received extra help from Bank of Canada governor Mark Carney, who issued a conditional commitment to keep the policy rate at the record low of 0.25 per cent until next summer. That means the best mortgage rates will hold near their record lows for at least a little longer.

Read the rest of the article here .

Canada’s big banks followed the Bank of Canada’s interest rate cut today by 0.25% by dropping their prime rates by the same 0.25% as well. The following banks announced lower prime rates, which will all be effective tomorrow, April 22, 2009:

See how these rates stack up against the competition and compare mortgage rates now.

Some of Canada’s big banks reacted to the Bank of Canada’s (BoC) 0.25% interest rate cut by dropping their Prime rates to 4.00% and this represented a cut of 0.25%-0.35% from their previous Prime rates. TD Canada Trust, Scotiabank, Bank of Montreal (BMO), CIBC, all moved to 4.00% which takes effect today, October 22, 2008, while the National Bank of Canada and RBC have kept their Prime Rates at 4.25% as of this morning.

TD stated that its “decision to lower its Prime by 35 basis points reflects today’s Bank of Canada rate change, as well as the decrease in our cost of funds due to government actions and market forces, allowing us to pass the benefits on to customers”.

The fact that the banks matched or exceeded the BoC’s rate cut is very good news as it implies that things may somewhat be returning to normal. The big banks failed to match the BoC’s 0.50% rate cut a few weeks back as their own costs of funds weren’t decreased due to the lack of interbank lending in the markets, and so couldn’t pass the savings onto customers.

The best variable rate we had on the site was 4.50% yesterday, so we’ll see if that changes today.

After yesterday’s coordinated move by global central banks to decrease interest rates by 0.50%, including the Bank of Canada, some of the big Canadian banks announced drops in their Prime Rates – but only by 0.25%. The big banks that did this include Royal Bank of Canada (RBC), TD Canada Trust, CIBC, ScotiaBank, Bank of Montreal (BMO), and the National Bank of Canada (NBC).

This means that the Prime rate for these banks is now 4.50% versus 4.75%. Typically following a BoC rate decrease, banks would follow suit, but as these are extraordinary times their cost of borrowing has increased and they can’t pass on the normal savings to customers through lower rates.

As TD Canada Trust stated in their announcement:

“Like all financial institutions, we have been watching the key lending rates very closely. Continuing market turmoil has steadily driven up the cost of borrowing for financial institutions. This makes it challenging to match the Bank of Canada rate cut at this time. We recognize the efforts the Bank of Canada is making and, despite the fact that our cost of funds remains high, we have decided to reduce our rate by 25 bps. We see this as a balanced move in managing our funds and passing along the intended benefits to our customers.”

After yesterday’s BoC rate cut, the best variable mortgage rate remained at 4.25%, and we’ll keep an eye on this to see if it changes in the next few weeks.

You can go compare mortgage rates now to see the latest rates.