Canadian Banks Cutting Mortgage Rates On Lower Canadian Govt Bonds

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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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu