RBC Hikes Mortgage Rates

Royal Bank of Canada, Canada’s biggest lender, said it had lifted the posted rates on some of its fixed-rate mortgages, following the lead of its biggest rival Toronto-Dominion Bank on Wednesday, Reuters reported. The move will make it even harder for borrowers to obtain home loans, coming after Canada’s banking watchdog introduced new rules at the start of the year compelling banks to test if borrowers can afford to repay loans at a level 200 basis points the contracted rate. RBC said that rates on its one-year to four-year fixed rate mortgages would rise by 15 basis and rates on its five-year to 10-year fixed rate mortgages would rise by 20 basis points from April 30. The bank’s current posted fixed five-year mortgage rate is 5.14% and it will rise to 5.34%. However, RBC’s five-year variable mortgage rate will fall to 3.3% from 3.45%. TD Bank lifted its five-year closed rate by 45 basis points to 5.59%. Canada’s third-biggest lender, Bank of Nova Scotia, declined to say if it was considering hiking rates. CIBC said its rates remained unchanged. Bank of Montreal did not respond to requests for comment.