Flaherty is cracking the bullwhip again and warning that recent mortgage rate increases by TD, RBC and CIBC are just the beginning. If certain Canadian cities were to experience a downturn in their housing markets both Flaherty and Carney are now firmly set up for the ‘we warned you’ speech.
All three banks have increased the posted rate for a five-year closed mortgage by a quarter of a percentage point, to 5.44 per cent.
RBC also raised its special fixed rate offer for a five-year closed mortgage by the same percentage amount, to 4.39 per cent.
Finance Minister Jim Flaherty said he’s not surprised.
“The recent increase by a couple of the banks is exactly what we expected,” Flaherty told reporters in the foyer of the House of Commons.
And more increases should be coming, Flaherty predicted, since lending rates have been hovering close to historic lows.
“We’re likely to see higher interest rates as we go forward because interest rates are still very low.”