Grant Ellis
Province
Royal Bank of Canada is leading the charge to higher mortgage rates, boosting the cost to new home buyers for the third time in less than a month.
The country’s biggest bank said Monday it is lifting the rate on most mortgages by 15 basis points.
After hikes of 60 basis points and 25 basis points, respectively, Monday’s hike brings the rate on Royal’s five-year closed fixed-rate mortgage to 6.25 per cent.
TD Canada Trust wasn’t far behind, raising rates Monday afternoon on some mortgages between 15 and 25 basis points. The rate for its five-year closed, fixed-rate mortgage is now 6.25 per cent as well.
When Royal hiked rates in late March and earlier this month, the other big banks followed suit soon after.
The banks say they are raising mortgage rates because their own cost of funding is going up ahead of expected rate increases from the Bank of Canada and U.S. Federal Reserve this summer.
Homebuyers are facing higher costs on other fronts as well, with more stringent mortgage-lending rules that took effect April 19 and the looming introduction of the harmonized sales tax in Ontario and B.C.
Many homebuyers are expected to try to rush to make their purchases ahead of the changes to keep their costs down.
Canada‘s real-estate market has been booming since the economy emerged from recession last year as consumers take advantage of some of the cheapest mortgage rates in decades.
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