Effective today, both RBC and TD have dropped their 5 year fixed mortgage rate by 10 basis points, which now sit at 5.34 per cent.
Investors’ reservations toward Greece, the U.S. and the overall economic stability in Europe, have turned them to the safety provided by Government of Canada bonds. The increased demand has pushed the price of bonds up and as a result, bond yields have decreased.
At the beginning of the month, the 5-year benchmark Government of Canada bond yield stood at 1.6 per cent. Since then it has since fallen over 14 per cent to its present level of 1.4 per cent. This decrease signaled to RBC to adjust their benchmark mortgage rate yesterday. RBC was the first of all major banks to make a change.