Wow….TD just boosted their 5 year posted mortgage rate to 5.59% a full 40 basis point over their previous rate of 5.19%
This matters for a few reasons..
Its the average of the big banks 5 year posted rate that the Bank of Canada (BOC) qualifying Rate is derived from. If enough of the big banks do this you can expect a higher BOC qualifying rate. This would make it harder to qualify for a mortgage since that rate is used in both insured and uninsured stress tests for home buyers and investors.
It also means that if you’re in the process of a mortgage application with TD you should quickly start to look at other lenders..they just made it harder to qualify with them.
And finally remember that the calculation for breaking a fixed mortgage with TD has an add back in the penalty calculation equal to the discount you received from the posted rate effectively increasing a breakage penalty significantly.
If the big banks follow suit less affordability is a possibility. I’m wondering if this will effect selling prices.
Just in time for the spring market..odd timing hmmmmm….