Mortgage rates up at all Big Six banks

BMO, National Bank the latest to make move as Bank of Canada decision looms

TORONTO The “Big Six” Canadian banks have now all hiked mortgage rates ahead of a Bank of Canada policy announcement on Wednesday.

Bank of Montreal and National Bank of Canada became the latest to do so Tuesday, with both raising their posted five-year, fixed-rate mortgage rates to 5.14 per cent from 4.99 per cent, among other changes.

A BMO spokesperson said its rate changes “reflect the current competitive environment, cost of funds and other market considerations.”

The moves followed rate hikes last week by Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank, which variously cited “recent activity by competitors,” “market conditions,” and “Bank of Canada rate changes” as some of the factors that are considered as part of an increase.

Bank of Nova Scotia, meanwhile, lifted some rates effective Monday, including hiking its posted fiveyear fixed-rate mortgage rate to 5.14 per cent from 4.99 per cent. The lender also boosted its oneyear, two-year, three-year, fouryear, seven-year, and 10-year fixedrate mortgages by 20 basis points.

“Our number one focus is providing value for our customers — we manage our pricing very actively to do just that,” said Scotiabank spokesman Lukas Gerber on Monday in an email. “We use a variety of market benchmarks to set rates.”

The Bank of Canada is set to make its next policy announcement on Wednesday, with the potential for a hike to its key interest rate having risen in recent weeks thanks to strong economic data.

While the rate hikes by the Big Six will affect consumers, they may also have an influence on a key central bank statistic which has become more relevant since new rules for uninsured mortgages came into effect at the start of January.

Those changes include a new “stress test” homebuyers must pass to qualify for an uninsured mortgage, with the cut-off set at either the Bank of Canada’s fiveyear benchmark rate or the contractual rate plus 200 basis points, whichever is greater.

The rate hikes from the Big Six could affect the Bank of Canada’s benchmark rate and, therefore, the threshold would-be homebuyers must meet to qualify for an uninsured mortgage.