The same day that the Bank of Canada announced its 25 basis point rate hike, RBC, TD, BMO, Scotiabank, CIBC, National Bank and Desjardins have said they will raise their prime rates accordingly.
The seven banks are upping their prime lending rates 25 basis points to 2.95% from 2.70%. All are making the move effective July 13, affecting major loans like mortgages.
The BoC on Wednesday raised its key lending rate by 0.25 percentage points, or 25 basis points, to 0.75%, marking its first interest rate hike in seven years.
Read: BoC sounds bullish as key rate hiked to 0.75%
Zoocasa CEO Lauren Haw says a mortgage rate increase will not impact the housing market. “The increased benchmark interest rate of 0.25% should not have an adverse effect on the housing market, as we are still in a very inexpensive lending period,” she wrote in a statement released shortly after the BoC rate decision.
“Mortgage rates remain at historical lows since the decrease seen after the 2008-2009 recession and it will take a series of increased rate hikes before we see a significant impact on homebuyers in Canada.”
She adds that Toronto Real Estate Board data from 2010, the last time rates were hiked, “show that the pattern of home sales and prices didn’t change afterward [the hike].”
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