Gasp! Big banks compete on mortgage rates
May 9 2018
Canada’s major banks are currently competing on mortgage rates, a rare occurrence comparable to gas price competition or, perhaps, Sasquatch sightings.
Oldtimers say they exist, but are rarely seen.
The rate wars began last week when TD Bank and Royal Bank both raised their mortgage rates. Normally, the other banks would have quickly followed suit. Not this time.
As of our press time, Scotiabank and Bank of Montreal were standing pat, creating a 45 basis-point spread on five-year, fixed-rate mortgages compared to the Toronto Dominion Bank.
Canadian Imperial Bank of Commerce lifted its five-year rate 15 basis points to 5.14 per cent, compared to 5.59 at TD Bank.
This CIBC rate matched the five-year rate at Bank of Nova Scotia and Bank of Montreal.
There is convergence on non-posted rates for better borrowers. Canada’s big banks are offering unadvertised discretionary rates of 3.39 per cent for five-year fixed mortgages and 2.75 per cent for variable-rate mortgages, according to RateSpy.com. That’s little changed from January.