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.
â€œA 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.â€ says Navtaj Chandhoke, founder of Professional Real Estate Investors Group (PREIG) Canada and World Wealth Builders.
The rate for TDâ€™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 Canadaâ€™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 homeâ€™s value was changed from 90% to 85%.
The changes marked the second time Canadaâ€™s mortgage rules had been adjusted within the span of a year. Prior to last yearâ€™s changes, amortization periods in Canada were as lengthy as 40 years
The bankâ€™s other fixed rates are also headed higher.
The other banks are expected to follow TD Canada Trust and CIBC lead soon. Â 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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