TD increase in mortgage rate ‘biggest move in years’

Toronto-Dominion Bank has lifted its posted rate for five-year fixed mortgages by 45 basis points to 5.59 per cent as government bond yields touched their highest levels since 2011 this week.

“It’s a big move, the biggest move in years,” said Rob McLister, founder of RateSpy.com, a mortgage comparison website. “There’s a lot of reasons why that could be — maybe they’re taking a position on rates going forward, which is not that typical; maybe they’re trying to get people to lock in and generate better spreads.”

Meanwhile, Royal Bank spokesman AJ Goodman says the lender plans to raise its posted rate for a five-year fixed mortgage on Monday to 5.34 per cent compared with the 5.14 per cent currently posted.

Toronto-Dominion, Canada’s second-largest lender, lifted its five-year closed rate on Wednesday, along with increases to its two-year, three-year, six-year and seven-year mortgage rates, bank spokeswoman Julie Bellissimo said Thursday in an emailed statement.

Banks generally give homebuyers better terms than their posted rates. Canada’s big banks are charging their preferred customers with sound credit quality 3.39 per cent for five-year fixed mortgages and 2.75 per cent for variable mortgages this month, according to RateSpy.com. That’s little changed from late January.

Canada’s housing market has been on a wild ride. House prices in Toronto have begun to stabilize after dropping sharply from last year’s dramatic spike, while prices in Vancouver have rebounded.