Royal Bank of Canada Cuts Mortgage Rates as Yields Drop

Royal Bank of Canada is the first major lender to lower mortgage rates after five-year bond yields fell in the wake of a surprise cut by the Bank of Canada last week, according to rate-monitoring websites.

Royal Bank, the country’s second-biggest lender by assets, offered a five-year fixed rate of 2.84 percent on Jan. 24, down from 2.94 percent last week, according to rate-tracking website That’s below RBC’s posted rate of 4.84 percent. The bank also trimmed its three-, seven-, and 10-year rates, according to, an industry news website.

The bank joins other lenders standing pat on its 3 percent prime rate, which is tied to variable mortgages and lines of credit. Prime typically moves in tandem with the Bank of Canada rate, which was cut to 0.75 percent on Jan. 21.

“We continue to review the impact of the Bank of Canada rate decision,” Wojtek Dabrowski, a spokesman for the Toronto-based bank, said in an e-mail today. “Our individual product lines continue to make pricing adjustments in the regular course of business to ensure we provide competitive rates in the marketplace.”

Fixed-rate mortgages tend to rise and fall with bond yields. Yields on five-year government bonds plunged 17 basis points on the day of the Bank of Canada cut, to about 0.86 percent. That’s down from 1.8 percent in April.

Royal Bank cut its 10-year fixed-rate mortgage to 3.84 percent, the lowest of any lender outside Quebec, according to

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