RBC raises mortgage rate

Tara Perkins
Globe and Mail Update Published on Tuesday, Apr. 13, 2010 12:59PM EDT Last updated on Tuesday, Apr. 13, 2010 1:19PM EDT
Royal Bank of Canada (RY-T59.39-0.18-0.30%) , the country's largest bank, has raised mortgage rates again.
The move, which will result in a 0.25 percentage point increase in the cost of a number of fixed-rate mortgage products that the bank offers, is likely to spark another round of rate hikes among the country's mortgage lenders.
RBC kicked off one series of hikes a little more than two weeks ago, and most experts said that was the start of a steady rise in mortgage rates.
At that time the cost of a five-year closed rate mortgage from RBC and many of its competitors rose by 0.60 percentage points to 5.85 per cent.
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Tuesday's increase will raise the rate for a five-year mortgage from RBC further, to 6.10 per cent, effective Wednesday.
Royal Bank's Canadian mortgage portfolio amounted to about $148.5-billion in the latest quarter.
The banks say they are raising rates because their cost of funds is increasing.