TORONTO – A move by Royal Bank to slightly decrease its fixed mortgage rates may have would-be homeowners wondering whether other banks may follow suit.
But one expert says that while that’s a possibility, it’s also not the most important question people should be asking.
RBC (TSX:RY) quietly lowered its rates on several fixed-rate mortgages by 10 basis points over the weekend. It was a small drop to the discounted rate offered by the bank until the end of the month, but one that went against the general trend of rising rates.
Jason Scott, a mortgage broker with The Mortgage Group in Edmonton, says a push to lower rates as big lenders compete for mortgages in the important spring market is possible, but the change simply brings RBC closer to those already being offered by some other lenders.
He also points out that this latest change is unlikely to have the effect major cuts have had in a past — like when the Bank of Montreal lowered its five-year rate to 2.99 per cent and created a price war.
Homeowners trying to get a sense of how rates will impact their mortgage payments, Scott said, would be better served by keeping an eye on the strength of the U.S. economy and changes in bond markets — factors that tend to have a greater impact on interest rates take than any incremental change by one lender.