Both Royal Bank and TD Bank: announced Monday their posted five-year closed mortgage

less than three weeks after Bank of Montreal appeared to launch a new mortgage war among lenders by cutting its rates, to just below 3 per cent, Canada's other major banks are raising their posted mortgage rates in a sign the time of ultra-low interest rate could be drawing
to a close.

 Royal Bank (TSX:RY) and TD Bank (TSX:TD) both announced Monday their residential posted five-year closed mortgage rates will move higher on Thursday Mar. 29 up 0.2 percentage points to 5.44 per cent , while both raised their special fixed rate offer on a four-year fixed rate by 0.5 percentage points to 3.49 per cent.

Canadian Imperial Bank of Commerce released a survey Monday indicating Canadians may be concluding that mortgages are less likely to keep falling. Home owners are more likely to choose fixed rate mortgages today than they were a year ago, it found.

Taken in early March, The survey by Harris/Decima, showed 50 per cent of Canadians would choose a fixed rate mortgage today, up from 39 per cent a year ago. Only 6 per cent think mortgage rates will be lower a year from now. The survey of 1,000 adults is considered accurate within plus or minus 3.1 per centage points, 19 time out of 20.

Meanwhile, their posted five-year variable rate which rises or falls along with the banks' prime lending rate — will rise 10 basis points to prime plus 0.20 percentage points. The prime rate, which usually moves with the Bank of Canada's key interest rate, is currently three per cent. The moves come after a recent race to the bottom that saw several banks offer special fixed rates as low as 2.99 per cent.

By Rising rates Banks are reacting to changes in the bond market, banks have to pay more for the money they raise to lend to home buyers. The cost of funding has probably increased for them because bond yields have gone up quite a lot in the last month or so, because there’s more optimism in the U.S.

Government of Canada five-year bond yields have jumped more than 50 basis points in the past three months alone. In a BMO report Friday, its economists argued that with the U.S. recovering gathering steam, central bankers on both sides of the border are becoming more comfortable with the economy and less so with historically low interest rates that in Canada are fanning the flames of the hot housing market.

Bank of Governor Mark Carney and Finance Minister Jim Flaherty have recently alluded to household debt as a danger to the economy. Household debt to disposable annual income is above 150 per cent.

The question might become whether this is the turning point, Is it the end of low mortgage rates, and are rates going to start rising a lot? we will have to stay tuned
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REAL ESTATE SNATCH is the independent real estate blog of Samir Safadi, Sales Representative of West-100 Metro View Realty Ltd, brokerage it is dedicated to covering Real Estate News, digital culture, social media and technology, providing analysis of trends, Market Data , reviewing new development. Offering Real Estate services resources and guides. Services are provided to prospective buyers and sellers of real estate by Samir Safadi, Sales Representative, West-100 Metro View Realty Ltd, brokerage, duly registered in the province of Ontario, under Real Estate and Business Brokers Act, 2002 (REBBA 2002) and Member in good standing with



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