Royal Bank of Canada Raises Mortgage Rate, Ending Special
Royal Bank of Canada, the country’s largest lender by assets, raised mortgage rates to reflect higher funding costs, ending a promotional rate three weeks before it was set to expire.
Royal Bank will increase its four-year fixed rate mortgage by 40 basis points to 3.39 percent effective Feb. 8, the Toronto-based lender said today in a statement. Royal Bank cut the mortgage rate to 2.99 percent on Jan. 13, following Bank of Montreal’s move to lower its five-year rate to a record low for the bank. Royal Bank’s special was set to expire Feb. 29.
“Mortgage rates are tied to the bank’s funding costs, which change from day to day,” Matt Gierasimczuk, a bank spokesman, said in an interview. “Our long-term funding costs have gone up considerably due to global economic concerns and, while we have held off in passing on these rate changes to our clients, it is now necessary for us to increase this mortgage rate.”
To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net
To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; David Scanlan at dscanlan@bloomberg.net
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