The other major banks followed RBC’s move to lower mortgage rates this week. Bank mortgage rates are dropping as result of lower 1, 2 and 5 year bond yields. Bond yields drive fixed rates because they are a big part of mortgage lenders’ cost of funds that they use for fixed mortgage rates. Variable mortgage rates have stayed the same as the Bank of Canada has not changed their target for the overnight rate (which influences variable rates). The next Bank of Canada announcement is on December 8, 2009.

CIBC

CIBC mortgage rate changes:

TD

TD mortgage rates changes:

Fixed Rates

Variable Rates

VIRM Closed TD Mortgage Prime
VIRM Open TD Mortgage Prime + 0.80%

BMO

BMO mortgage rate changes:

Fixed Rates

Variable rates

5 year closed 2.25%
3 year open 3.05%

Special Offers*

5 year(fixed/closed) 4.29% -0.19%

*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withdrawn or extended without notice.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.

Scotiabank

Scotiabank mortgage rate changes:

Their special discounted rates* also changed:

one-year fixed closed 2.35 per cent (decreases by 0.20 per cent)
five-year fixed closed 4.29 per cent (decreases by 0.25 per cent)

* 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 Offers may be withdrawn or extended without notice and cannot be combined with any other rate discounts, offers, or promotions.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.

Fixed closed mortgage rates are on the rise again as longer term bond yields have increased again, after rising last week as well. These yields are the main influence on fixed mortgage rates, and TD Canada Trust was the first bank to announce it was increasing it’s long term fixed mortgage rates. Interestingly they dropped the rate on their 1 year fixed rate at the same time indicating short term funds are not proving costlier at the moment.

It has been reported in the Toronto Star that the reason bond yields have been increasing is that the market is starting to price in an economic recover beginning later this year or next year. This occurrence hasn’t only been limited to Canada, as international bond yields have risen over that past few weeks.

TD Canada Trust’s latest mortgage rates are as follows and effective today, June 10, 2009:

We’ll keep an eye out if the other banks follow suit.

See how TD mortgage rates compare against the market.

TD Canada Trust followed BMO and RBC by increasing their longer term fixed rate mortgages by 0.20%.

The new mortgage rates are as follows:

CIBC also followed suit and their mortgage rates are now:

TD Canada Trust has lowered its mortgage rates, effective April 28, 2009. This follows RBC mortgage rate cuts on April 25th, 2009.

The changes are as follows:

Fixed mortgage rate changes

Variable rate changes

Compare TD mortgage rates against the market now.

In a very positive response to the Canada Mortgage and Housing Corp’s (CMHC’s) announcement last week to buy up to $25 billion in insured mortgages from the banks, providing lenders with additional cash, giving them more money to lend to consumers and businesses, Scotiabank dropped their Prime Rate to 4.25%, down 0.25%, while TD Canada Trust lowered their’s by 0.15% to 4.35% effective yesterday, October 14th, as reported in the Toronto Star.

This followed the unusual move last week when the Bank of Canada dropped its target overnight rate by 0.50% and the Big Banks only decreased their Prime Rates by 0.25% whereas they would normally follow suit, as we reported here.

TD Canada Trust CEO Tim Hockey said, “We believe that this initiative will be put into effect in a way that will reduce our overall cost of funds and, as a result we are dropping our rate today. As we’ve been saying, a number of factors go into decisions about rate changes. Financial markets are very turbulent, and funding costs are still high. However, we anticipate that our cost of funds will decrease with the implementation of this program, and therefore wanted to take action that
will benefit our customers directly.”

This additional measure by the Federal government to minimize the effects of the global financials crisis means they have injected a huge $45 billion in additional cash into the financial system.

On RateSupermarket.ca, we didn’t see any declines in variable rate mortgages, as the best was still on at 4.50%, but we’ll see if there’s a drop today.