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Toronto Dominion Bank has become the first national bank to raise its mortgage prime rates following the new mortgage rules announced last month.
TD’s variable rate will hike up 0.15 points from 2.7 to 2.85 per cent, after having remained steady for 15 months.
Fixed-rate customers should see no change, and the rates associated to other products such as lines of credit are not affected.
It’s expected that the other major landers such as CIBC, Scotiabank and BMO will follow suit, seeing as it’s rare for the big banks to have such a large variance in prime lending rates.
The raised rates are in response to a new stress test for borrowers, as well as a new set of rules that will render many types of mortgages ineligible for bulk insurance – thus making it more expensive for banks to insure their loans.
Buyers and investors thinking of buying in the next 6 months should therefore get pre-approved and lock in a low fixed rate as soon as possible.