Cash strapped banks hike mortgage rates - MoneySense

Cash strapped banks hike mortgage rates

Cost of borrowing drives rate increase.

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Two of the Big Five banks have announced increases to mortgage rates due to the climbing costs of raising capital in the bond market.

RBC and TD Canada Trust announced rate hikes this week, while Scotia Bank has warned of a similar measure.

The increases reflect the climate of the North American bond market, where financial institutions borrow money to lend to mortgage customers. North American bonds are being dumped by investors in favour of stocks, forcing the banks to raise pay more attractive interest rates.

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