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Canadian banks are raising mortgage rates by up to a quarter of a percentage point.
Bank of Montreal and Royal Bank on Thursday announced across-the-board rate hikes affecting most fixed-rate mortgage terms.
Other banks are expected to follow.
The new five-year posted mortgage rate at both institutions will be 6.84 per cent, effective Friday. Banks typically discount their posted rates by a full percentage point or more.
That's a jump of a fifth of a percentage point at BMO and a quarter of a point at RBC.
Mortgage rates are going up because yields in the bond market are rising. Banks finance their mortgages in the bond market.
The two-year bond yield jumped .12 percentage points Thursday when Statistics Canada released higher than expected inflation figures for April.
That raised the chance that the Bank of Canada might move earlier to raise rates to rein in inflationary pressures.
"Canadian short-term yields jumped like a scalded cat after the high-side CPI and a strong wholesale trade report," a BMO Capital Markets statement said.
TD Securities' chief fixed-income strategist Marc Lévesque told CBC News he thinks it's now possible the central bank could hike rates as early as the July policy meeting.
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