RBC is increasing several of its residential mortgage rates, including fixed posted rates as well as special offer rates. The announcement comes on the heels of the Bank of Montreal’s decision to raise some of its mortgage rates.
Should trends continue, your clients with variable rates may need to adjust their spending habits to cope with increased monthly payments. Advisors should view this as an opportunity to revisit budgeting and debt-level discussions with clients and, if appropriate, discuss faster routes to payoff.
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Likewise, for any clients on the fence about home buying, this move by two major lenders presents an opportunity to advise them to lock rates to stay ahead of the rate rise trend. Housing tends to lead economies both in and out of recessions, and a bump up in mortgage rates is a harbinger of higher overall borrowing costs for consumers in coming years.
For the most part, Royal Bank is increasing the rates by 20 basis points, with its fixed five-year closed mortgage rising to 5.34% and its five-year special rate to 3.89%.
The rate changes are effective today.
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Other rates rising 0.2 percentage points include the bank’s posted three- and four-year closed rates to 3.95% and 4.74%, respectively.
Royal’s special offer four-year closed rate also goes up 20 basis points to 3.59%, its seven-year special offer closed rate by 20 basis points to 4.19% and its 10-year special offer closed rate to by 30 basis points to 4.59%.
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On Tuesday, Bank of Montreal boosted two rates by 20 basis points. The five-year fixed closed rate and the five-year special fixed closed rate are now both 3.79%.
Laurentian Bank followed suit Wednesday, announcing 20-basis point boosts to its three-year, four-year and five-year fixed rates.
The rates are now 3.95%, 4.74% and 5.34%, respectively.