Skip to main content

Royal Bank of Canada, the country's largest bank, is leading the way on another round of mortgage-rate hikes, boosting borrowing costs Monday for the third time in recent weeks.

The rate on a five-year closed mortgage is now 6.25 per cent, an increase from the previous rate of 6.10 per cent. A one-year closed rate will, as of Tuesday, be priced at 3.80 per cent. All rates were increased by 15 basis points.

It's the third move in a month as Canadian banks prepare for an era of rising interest rates. The Bank of Canada last week signalled that its key lending rate will rise, as early as June, as the economy recovers.

Story continues below advertisement

Cat:e528746c-3414-401a-b14b-50247e3bdf01Forum:726cb897-65e7-4529-a1da-c5192c9aa85a

Toronto-Dominion Bank was next to follow suit, boosting its mortgage rates by between 15 and 25 basis points.

Banks can adjust the rate they charge, so customers could still pay a lower rate than what's posted. Other banks tend to follow with rate hikes once one does, and the actual rate a customer pays depends on a variety of factors, including their financial situation, whether they use a mortgage broker, and how good they are at negotiating.

The hike comes the same day as Canada Mortgage and Housing Corp. released a study showing that 81 per cent of recent home buyers feel comfortable with their current level of debt.

Two thirds of the 2,500 people surveyed said there is a chance they will pay off their mortgage sooner than required, while 27 per cent said they have increased regular payments to eliminate their mortgage sooner.

Report an error Licensing Options
About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More

Comments are closed

We have closed comments on this story for legal reasons. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.