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25 Apr

TD boosts posted 5 year mortgage rate

Mortgage Tips

Posted by: Robert Ganzhorn

TD Canada Trust

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….