Could This Be The End Of Rock Bottom Mortgage Rates?

RBC is set to raise interest rates today, Friday, Jan. 8th, 2016. Could this be the end of rock bottom mortgage rates or just another false alarm? And could other banks and mortgage lenders follow? Sometimes they do and sometimes they don't. There are numerous reasons why RBC is raising their interest rates including the most popular 5 year fixed up to 3.04%
As a mortgage broker, I can still have access to a 5 year fixed at 2.64% with better options to pay down your mortgage and penalties, if ever faced with one, 1000's of dollars less than at the big banks.
See the full article attached from Globe & Mail for the reasons why rates are going up:
As always if you have any home financing related question feel free to call me at 604 505 7109 or email me anytime.
Tony Marchigiano 310-328 West Hastings Street
Mortgage Broker Vancouver, BC

cell: 604 505 7109
fax: 604 909 4666

Royal Bank of Canada is set to raise rates on several of its mortgages, the latest in a series of changes to the mortgage industry that could help cool the housing market this year.

Starting Friday, the bank said it planned to increase rates on fixed mortgages of between two and five years by 10 basis points. (A basis point is 1/100th of a percentage point.) RBC’s five-year variable rate will increase by 15 basis points.

The move reflects RBC’s discounted rate specials given to customers who qualify, and pushes its five-year fixed rate up to 3.04 per cent. No other major Canadian banks announced matching rate increases on Tuesday, although lenders often closely follow each other in changing mortgage rates.

RBC’s move comes amid sweeping changes by federal regulators last month to curb soaring home prices in cities such as Toronto and Vancouver, including hikes to minimum down payment rules, higher costs to lenders who securitize and sell their federally insured mortgages and a proposal by the Office of the Superintendent of Financial Institutions to require banks to hold more capital against some mortgages.

In an e-mailed statement Sean Amato-Gauci, RBC’s senior vice-president of home equity financing, said rate increases weren’t a response to the recent federal rules changes, but “reflect a number of factors (beyond the bond yield), including changes in market conditions driving increased short-term funding costs and long term/wholesale funding costs.”

Funding costs to mortgage lenders have increased in recent months amid intense competition for deposits and from investors who have started demanding greater risk premiums for bank debt.

But the recent regulatory changes, which have yet to take effect, are also putting pressure on banks, said Robert McLister, a mortgage planner at intelliMortgage Inc. and founder of “To a certain extent lenders are pricing that in, in advance,” he said. “These are real behind-the-scenes factors that are inflating lenders’ funding costs.”


SOURCE < TheGlobeAndMail


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