Royal Bank of Canada (RY), the country’s second-largest lender by assets, cut some of its residential mortgage rates amid declining yields on Canadian government bonds.
Royal reduced its five-year fixed mortgage 10 basis points to 5.24 percent on Jan. 18, the first decrease in 10 months, Sean Amato-Gauci, senior vice president of home equity financing, said today in an e-mailed statement. Royal Bank also pared other home loans by the same amount, including reducing its five-year mortgage special to 3.69 percent, he said.
The yield on Canada’s five-year government bonds, the benchmark security in the market where banks finance mortgage lending, has fallen 27 basis points this year to 1.67 percent, the lowest level since July, as weaker-than-expected economic data fueled speculation the Bank of Canada will signal a bias to lower its benchmark interest rate.
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