TD Bank hikes rates anew

Toronto-Dominion Bank is now charging an additional 25 basis points to the overall rate for all new mortgages on rental properties.
Implemented on December 1, the bank also added 10 basis points to its overall rate for all new fixed amortizations of 25 years or more, The Canadian Press reported.
In an email, a TD spokesperson said that the bank regularly reviews its rates and adjusts them based on existing conditions such as the market competition and the cost of funding mortgages.
The December 1 hike came in the wake of a similar move by the bank on November 15, which added 5 basis points to its special rate offer for a 4-year fixed mortgage and 10 basis points to that of a 5-year fixed mortgage.
In a statement on Monday (November 28), Jeremy Rudin of the Office of the Superintendent of Financial Institutions cautioned lenders to maintain prudent underwriting standards as the market cannot rest assured of low interest rates and rising property values.
“When house prices have been rising for several years and interest rates have remained at all-time lows, complacency can set in,” the superintendent wrote in the text of a prepared speech for a meeting of mortgage professionals in Vancouver.
“Lenders might be led to believe that weak underwriting standards will be mitigated by ever-rising collateral values.”
The co-founder of mortgage information portal recently warned Canadian consumers that TD Bank’s hikes are just the beginning, and that they should brace themselves for greater expenses in the near future.
“I do expect rates to continue to push up in the coming months and into next year, as opposed to the opposite,” James Laird said, adding that the increased uncertainty in the global bonds market amid the results of the U.S. presidential elections is the crucial factor that will drive these increases.

Related stories:
Banking regulator warns lenders not to become complacent about mortgages
Industry players weigh in on TD Bank mortgage rate hike

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  • by Omer Quenneville 2016-12-02 10:59:17 AM

    I'm not surprised at this move by TD. They have most of their clients tied up with collateral charges making it more difficult to switch lenders so now is the time to take advantage of the trap.

  • by DIZZY 2016-12-02 11:03:55 AM

    Interest rates should have gone up years ago. A slight increase in mortgage rates for home owners will have critical results for those with little or no equity. Now the BOC is looking for an injection of money into the market place from the Feds. Couple high interest rates with equity lines of credit and a drop in real estate values will result in Power of Sale. Anyone remember the 1990's?

  • by Schilight 2016-12-03 10:54:03 AM

    The bank is overworked with mortgage applications and they've probably just decided to clear the backlog by making their product less desirable while they get caught up; watch for a renewed decrease in the spring when they're ready to ramp things up again.

    If their business doesn't slow down as a result of the rate increase, then expect it to stay while other banks follow suit...

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