As we mentioned last week fixed mortgage rates were under pressure to move higher as bond yields, the main influence on fixed mortgage rates, have been increasing steadily. Today, the first bank moved as TD mortgage rates were increased for different fixed terms from 0.15% – 0.25%.

These changes are effective tomorrow, February 8, 2011, and you can expect the other banks to follow suit with their own mortgage rate increases later this week. If you’re looking for a mortgage right now, you can get pre-approved to lock in a fixed rate while you’re looking before more fixed rates go up. Variable rates are still not expected to increase until later in the year.

Here is the detailed list of TD mortgage rate changes:

Fixed Rates	To:	Change:	Compare rates
1-year closed	3.50%	+0.15%
2-year closed	3.75%	+0.15%
3-year closed	4.35%	+0.20%
4-year closed	5.14%	+0.20%
5-year closed	5.44%	+0.25%
6-year closed	5.95%	+0.25%
7-year closed	6.34%	+0.25%
10-year closed	6.65%	+0.25%
Special Fixed Rate Offers
1-year closed Special	3.09%	+0.15%
2-year closed Special	3.35%	+0.15%
4-year closed Special	4.34%	+0.20%
5-year closed Special	4.39%	+0.25%
7-year closed Special	5.19%	+0.25%
10-year closed Special	5.44%	+0.25%

You can see how these latest TD mortgage rate changes compare against the other best mortgage rates here.

Banks tighten their belts

There’s nothing like a bit of mortgage rate activity to get Canadians out of a post turkey daze.

This week, all of the big banks have announced decreases to fixed mortgage rates. RBC was the first one to drop rates by 10 basis points, quickly followed by Scotiabank, TD and BMO. CIBC announced today that they would follow suit as well. This puts the popular 5 year fixed rate at 5.29%.

Fixed mortgage rates are affected by the Bank of Canada bond yields for the same term. Since the middle of September we’ve seen bond yield drop steadily. At the beginning of October, it was evident that yields had decreased, but few experts expected the banks to react by lowering fixed mortgage rates.

Our Mortgage Rate Outlook Panel of experts felt strongly that lenders had already tightened their belts enough by squeezing margins, and that any extra decreases were unlikely.

Since then, the US has confirmed sinking consumer confidence, decreased job creation, soaring commercial vacancies, and a decision by some of the largest mortgage lenders to freeze foreclosures on residential properties. The Canadian outlook seems to be moving along (albeit at a slow pace), but without decent recovery from our largest trading partner, we’re limited in terms of growth.

So as the banks pull their belts a little bit tighter this week (most of us would find that very difficult following the Thanksgiving weekend), consumers are rewarded with incredibly low fixed mortgage rates.

PS. RateSupermarket.ca is currently showing a 5 year fixed rate of 3.39% (Oct 13th, 2010). This is a full service mortgage offered by a chartered bank. Get it now – we don’t know how long it will last!

Mortgage shoppers have even more reason to celebrate this month as fixed mortgage rates have dropped again. For the 4th time in the past month many of the big banks including RBC, TD and CIBC have dropped their 4 and 5 year fixed rates by 0.10%.

Fixed rates are heading lower as their main influence, Government bond yields, continue to dive as the benchmark 5 year bond yield is down 5.3% just today to 2.028 at 10.30am on August 24, 2008. With the spread between bond yields and fixed mortgage rates increasing, looking at historic spreads, there is room for fixed rates to fall even further.

Interestingly, RBC and TD only issued press releases saying their discounted fixed rates were heading lower while the posted 5 year fixed rates were decreased on their websites.

Could this be a shift where the big banks start to advertise more based on rate? The first signs of this was a few months back when BMO had a big marketing where they were proactively advertising their 5 year discounted 5 year fixed rate in print, TV etc. This was a change in direction for a of big bank mortgage lender to advertise on rate. Another change in strategic direction is CIBC’s now long-running campaign incentivizing home owners to ‘Switch’ to CIBC with higher air miles and cash back.

Where customer loyalty is the ultimate goal amongst the big banks pushing for a greater ‘share of customer’s wallet’, CIBC actively asking customers to switch shows a change in direction in the market and hopefully a change in Canadian consumer behaviour. Many home owners can save money by simply comparing the market and seeing what other offers are out there to access lower mortgage rates and we hope to help this trend continue.

Here are the latest fixed mortgage rate changes:

RBC fixed mortgage rates changes

TD fixed mortgage rates changes

CIBC fixed mortgage rates changes

You can compare mortgage rates here to see how these stand against brokers and credit unions.

Today’s mortgage rate changes only affect the 5 year fixed closed mortgage rates and the decreases are both by 0.11%, bringing their respective 5 year fixed posted rates to 5.99%, and we expect the other banks and lenders to follow suit.

RBC & TD’s posted 5 year fixed mortgage rates are now as follows:

Posted: 5.99% (-0.11%)

Discount rate: 4.59% (-0.11%)*

* The rates indicated are special discounted rates and are not the posted rates of Royal Bank of Canada. To calculate a rate discount compare the Special Offer rate against the posted rate for the applicable term.

RBC posted 5 year fixed mortgage rates:

Posted: 5.99% (-0.11%)

Posted: 4.59% (-0.11%)*

* The rates indicated are special discounted rates and are not the posted rates of Royal Bank of Canada. To calculate a rate discount compare the Special Offer rate against the posted rate for the applicable term.

Since our last 5 year government of Canada bond yield update, which is the main influence on 5 year fixed mortgage rates, we’ve seen the following drop, which has resulted in the 5 year fixed mortgage rate lowering as well:

5 year Government of Canada bond yields:

April 21, 2010 (peak): 3.205%

May 6, 2010: 2.764% (-13.8%)
May 12, 2010: 2.975% (+7.6%)
May 19, 2010: 2.687% (-9.7%)

Yesterday’s close of 2.687% is the lowest the bond yield has been since early March 2010 before fixed mortgage rates started rising from all-time lows towards the end of March. Today’s (May 20, 2010) intra-day trading saw this yield drop to a low of 2.547%, but it since has recovered to 2.616% as of 3.15pm.

It’s a great sign that the banks are dropping mortgage rates as their costs of borrowing decrease (lower bond yields) as that’s the reason they cited increasing these same rates in the first place. We’ll see how this roller coaster continues, especially as we approach the next Bank of Canada rate announcement on June 1st, where they’ll announce whether their increasing their key lending rate which influences variable mortgage rates. So we could see more turmoil in the next week or so.

TD Canada Trust and BMO Bank of Montreal were the first big banks to drop their benchmark posted 5 year fixed mortgage rates by 0.15%, effective today May 8, 2010. This comes as the main influence on these rates, the Government of Canada 5 year bond yields have dropped over the few weeks.

Fixed mortgage rates have been yo-yoing since late March when the 5 year fixed rate jumped up by 0.60%, the biggest one day increase in over 10 years, followed by another 0.25% bump a few weeks later, as follows:

Posted 5 year fixed mortgage rate changes since March:

• March 29: 5.25%
• March 30: 5.85% (+0.60%)
• April 14: 6.10% (+0.25%)
• April 27: 6.25% (+0.15%)
• May 8: 6.10% (-0.15%)

Only the 5 year fixed rate was changed, all other mortgage rates remained the same.

RBC & TD continued a worrying trend for home owners and mortgage shoppers today as they announced that fixed mortgage rates were increasing yet again by 0.15%. This follows previous rate hikes that RBC & TD led the market with at that time, which started on March 29, 2010 with the biggest change being in 5 year fixed mortgage rates going up by 0.60%   , and then another 0.25%   . With today’s announcement that means that some mortgage rates have increased a full 1%    in less than a month. The latest increases will take effect tomorrow April 27, 2010.

Although most people don’t pay the posted fixed rate by the banks, they do give a good indication of the general trend of rates. For comparison purposes, the lowest 5 year fixed rate featured on RateSupermarket.ca are:

Variable mortgage rates have stayed constant during the past month as they’re influenced mainly by the Bank of Canada’s key interest rate, which could start increasing as early as June 1, taking variable rates higher with it.

Fixed mortgage rates, on the other hand, are increasing due to the mortgage lenders cost of borrowing going up. Fixed rates are mainly influenced by government bond yields, and the 5 year government bond yield have gone up 10% at their peak in the last month, while 5 year posted fixed mortgage rates have gone up 19% (6.25% vs 5.25%).

RBC Updated Fixed Rate Mortgages

RBC’s rates are changing as follows:

Fixed Rates     To:     Change:

6-month convertible     5.05%    (+0.15%)
One-year closed         3.80%    (+0.15%)
Two-year closed     4.15%    (+0.15%)
Three-year closed     4.75%    (+0.15%)
Four-year closed     5.74%    (+0.15%)
Five-year closed     6.25%    (+0.15%)
Seven-year closed     7.05%    (+0.15%)
Ten-year closed     7.20%    (+0.15%)

Special Fixed Rate Offers*

RBC’s specials have also gone up:

Four-year closed     4.59%    (+0.15%)
Five-year closed     4.85%    (+0.15%)

* The rates indicated are special discounted rates and are not the
posted rates of Royal Bank of Canada. To calculate a rate discount
compare the Special Offer rate against the posted rate for the
applicable term. Special Offers may be changed, withdrawn or extended at any time, without notice. Not available in combination with any other rate discounts, offers or promotions.

TD Canada Trust Updated Fixed Rate Mortgages

TD’s rates are changing as follows:

Fixed Rates     To:     Change:

6-month convertible     4.85%    +0.25%   
1-year open     6.70%    +0.15%   
1-year closed     4.05%    +0.15%   
2-year closed     4.55%    +0.25%   
3-year closed     5.10%    +0.25%   
4-year closed     5.74%    +0.15%   
5-year closed     6.25%    +0.15%   
6-year closed     6.30%    +0.25%   
7-year closed     6.59%    +0.25%   
10-year closed     6.90%    +0.25%   

Special Fixed Rate Offers

Fixed Rates To: Change:

1-year closed     3.05%    +0.15%   
4-year closed     4.59%    +0.15%   
5-year closed     4.85%    +0.15%   
7-year closed     5.25%    +0.25%   
10-year closed     5.59%    +0.25%   

You can always check how these mortgage rates compare against the rest of the market with our mortgage rate comparison search.

The past few week’s speculation that mortgage rates were going to increase sooner rather than later came true today as RBC was the first major lender to increase its fixed mortgage rates. RBC announced they were increasing the 3, 4 and 5 year posted fixed rates by 0.20%, 0.40% and 0.60% respectively.

Even the special, discounted rates were changed the same amounts. This comes after these same fixed rates were lowered just a few weeks ago. TD also announced they were increasing the same rates by the same margin and you can expect the other big banks to follow. These changes will take effect tomorrow, March 30, 2010.

RBC mortgage rate changes

Fixed Rate Mortgages

Three-year closed 4.35 per cent (+0.20 per cent)
Four-year closed 5.34 per cent (+0.40 per cent)
Five-year closed 5.85 per cent (+0.60 per cent)

Special Fixed Rate Offers*

Four-year closed 4.29 per cent (+0.40 per cent)

Five-year closed 4.55 per cent (+0.60 per cent)

TD’s updated mortgage rates

Fixed Rates To: Change:

6-month convertible     4.60%     no change
1-year open     6.55%    no change
1-year closed    3.65%   no change
2-year closed    3.95%   no change
3-year closed    4.70%   +0.40%
4-year closed    5.34%   +0.40%
5-year closed    5.85%   +0.60%
6-year closed    5.80%   no change
7-year closed    5.99%   no change
10-year closed    6.30%   no change

Special Fixed Rate Offers     To:     Change:

4-year closed    4.29%     +0.40%
5-year closed    4.55%     +0.60%

Variable Rates     To:

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

See how these mortgage rates compare to the market, and if it may be time to lock in.

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.

The new mortgage rates are as follows:

CIBC also followed suit and their mortgage rates are now: