Mortgage Rates – 6th Week of 2012

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TD and RBC prematurely withdrew their offers for ultra-low mortgage rates. Toronto-Dominion Bank, Canada’s second-largest bank, increased its special four-year closed fixed rate mortgage by 40 basis points and its five-year closed mortgage by ten basis points, and it introduced a special five-year closed fixed rate mortgage at 4.04 per cent. Offers of special rates last until February 29th.

RBC increased its special five-year closed fixed rate mortgage product by ten basis points to 4.04 per cent. Matt Gierasimczuk, a spokesman with RBC, said for Bloomberg News: “Our long-term funding costs have gone up considerably due to global economic concerns and, while we have held off in passing on these rate changes to our clients, it is now necessary for us to increase this mortgage rate.”

According to a new report by UBS AG, household debt-to-income ratios are still at record high levels in Canada, but the risk remains moderate. Debt service is average, and loan-to-value ratios are low at 55 to 65 per cent. “Furthermore, there are government guarantees on 60 per cent of mortgages and residential delinquencies are only 38 basis points,” said analyst Peter A. Rozenberg.

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