TD Joins RBC in Raising Fixed Rates

TD Joins RBC in Raising Fixed RatesTD Joins RBC in Raising Fixed Rates

After cutting advertised rates last week, TD Canada Trust has followed RBC’s lead in lifting rates back up.

Like RBC, TD is raising its advertised:

  • 4-year fixed       …by 10 bps to 3.09%
  • 5-year fixed       …by 20 bps to 3.29%

These changes take effect Tuesday, June 11. And if history is a guide, they’ll likely be matched by most other major banks.

These hikes are being prompted by rocketing bond yields. The 5-year yield soared to a 13-month high on Monday, closing at 1.63%. That’s a climb of almost 1/2 percentage point in just over a month. This raises lenders’ fixed-rate funding costs materially, compelling them to pass along higher rates to borrowers.

Neither RBC nor TD announced any changes to their 5-year posted rates. As a result, the benchmark qualification rate may stay as-is. (The benchmark rate, currently 5.14%, is used to qualify borrowers for variable rates and 1- to 4-year fixed terms. The higher it goes, the harder it is to get approved—at least for folks with tight debt ratios.)

At the moment, there are still sub-3% five-year fixed rates available for live deals (i.e., deals with firm closing dates). But pre-approvals below 3% are getting tougher to find by the day.

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