Canadian Mortgage rates are rising

TD Canada Trust and CIBC are raising some of their fixed-term rates by as much as one-quarter of a percentage as of February 8th, 2011. Both TD Canada Trust and CIBC are raising their five-year mortgage, one of the most commonly chosen by homeowners, to 5.44 per cent.

“A quarter point increases on a $300K mortgage will add around $75 a month to on mortgage payments. It is still a great time for Professional Real Estate Investors or home buyers or for those who own a home looking for a better interest rate then what they had.” says Navtaj Chandhoke, founder of Professional Real Estate Investors Group (PREIG) Canada and World Wealth Builders.

The rate for TD’s five-year special closed fixed rate also increased by 25 basis points, and will now be 4.39%.

The increase marks the first mortgage rate hike since federal Finance Minister Jim Flaherty announced changes to Canada’s mortgage rules last month. As part of those changes, the maximum amortization period for a mortgage was lowered from 35 years to 30 years. As well, the refinancing limit of a home’s value was changed from 90% to 85%.
The changes marked the second time Canada’s mortgage rules had been adjusted within the span of a year. Prior to last year’s changes, amortization periods in Canada were as lengthy as 40 years
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The bank’s other fixed rates are also headed higher.

The other banks are expected to follow TD Canada Trust and CIBC lead soon.  The Big 5 last raised rates around December 15, but at that time they left posted rates as is. If the other banks match this new 5.44% posted rate, that means the qualification rate will likely rise on Monday by Bank of Canada.

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