Canada's big banks are boosting most of their fixed mortgage rates by about two-tenths of a percentage point as the cost of raising money rises.
TD Canada Trust, Scotiabank, and Bank of Montreal announced rate hikes on Thursday. Royal Bank moved Wednesday and CIBC was first off the mark on Tuesday.
The rate for a fixed five-year mortgage is rising by two-tenths of a percentage point at most banks. The popular mortgage now commands a posted rate of 7.54 to 7.59 per cent.
A one-year closed mortgage rises between 0.15 and 0.20 of a percentage point to 7.35 to 7.45 per cent.
Most banks will discount their posted rates by a full percentage point or more.
Liquidity premiums have been increasing as the credit crunch arising from the growing problems in the U.S. subprime lending industry makes it more expensive for banks to access funds.
Variable mortgage rates — which rise and fall in step with the Bank of Canada's overnight lending rate — fell earlier this month when the central bank trimmed its key lending rate by a quarter of a per cent.
Many economists expect at least one more rate drop from the Bank of Canada — perhaps at its next policy decision date on Jan. 22.
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