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TD Bank Raises Posted Mortgage Rates

TD bumped up its posted five-year fixed mortgage rate to 5.59 per cent, an increase of 45 basis points. That means that their posted rate is now also 45 basis points higher than the Bank of Canada five-year benchmark rate, which is used as part of the stress test if you have a low enough mortgage rate. They have also increased their two-, three-, six-, and seven-year rates.

 

Prime Remains the Same

This may come as a surprise as the last Bank of Canada interest rate announcement held prime rate at 1.25 per cent. Even if they had raised interest, the BoC usually only raises interest by 25 basis points at a time, meaning that TD’s increase would still have been 20 points higher.

The posted rate that the banks has is usually discounted for a customer once they apply for a mortgage. For instance, although the TD posted rate is 5.59 per cent for a five year fixed term, customers with great credit can get that same mortgage at 3.39 per cent, a discount of 2.2 per cent. This discounted rate is roughly the same as it was in January.

For a variable mortgage, the rate is even lower. TD still offers mortgages at 2.75 per cent for a variable term.

 

TD vs. the Competition

This move puts TD’s posted rates higher than the other Big Five institutions, who all have rates of 5.14 per cent, except CIBC who maintains a posted rate of 4.99 per cent.

If you want to see how TD’s rates stack up to the all of the competition (not just the Big Five), compare mortgage rates online here.

With this increase, you might be wondering if a fixed term mortgage is best, or if a variable term mortgage is best. We’ve already answered this question for you.


Ali Zaidi UW Ali Zaidi UW 01/26/2019
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