BMO, CIBC latest lenders to increase some mortgage rates
CIBC boosted its rate Saturday, following BMO's change earlier in the week
The Bank of Montreal and CIBC have each hiked some of their mortgage rates — a move that comes as the market is widely anticipating an increase next week in the key benchmark rate set by the Bank of Canada.
BMO increased its rates on both its five-year fixed and five-year "smart fixed" mortgages by 20 basis points as of Friday, bringing them to 2.89 and 2.79 per cent respectively, when based on a 25-year amortization period. The bank also hiked its three-year mortgage rate to 2.64 per cent, an increase of 10 basis points.
CIBC raised its fixed mortgage rates by between five and 15 basis points on Saturday, a spokesperson told CBC News. The rate posted online for a five-year fixed mortgage was 4.79 per cent, while the rate for a special offer three-year fixed mortgage is now 2.69 per cent, up from 2.59 per cent.
"This change in rates reflects many factors, including funding costs and market conditions," a statement from CIBC said.
"When deciding to buy a home, it's key to have an overall financial plan and budget. Buying a home is a big personal and financial decision and we work closely with our clients to help them make prudent financial decisions."
Banks are facing increased borrowing costs on bond markets as bond yields spike.
Earlier this week, RBC also boosted some of its mortgage rates, pushing its two-, three-, and five-year fixed-term rates up by 20 basis points each. TD also increased some rates.
At RBC, the two-year rate is now 2.54 per cent, the three-year rate is 2.64 per cent, and the five-year rate moves to 2.84 per cent. Those rates are for loans with amortization periods of no more than 25 years.
The hikes come in anticipation that the Bank of Canada will boost its trend-setting overnight rate on Wednesday. If the central bank does so, it will be the first time in seven years.
The Bank of Canada's target for the overnight rate currently sits at 0.5 per cent, with the market widely expecting a 25 basis point increase.