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Rbc and Td raise rates % Will there be a Pivot ? As locals cant keep up with Mortgage payments

701 views · Published 13 January 2018 · 5:49 · Indexed 3 October 2026

Channel: Mike Martins · 2018 · News & Politics

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My Opinion: Rbc and Td raise rates % Will there be a Pivot ? As locals cant keep up with Mortgage payments . or will they Pivot thus Causing Inflationary problems in the not so near future !


The Royal Bank of Canada and Toronto-Dominion Bank have both increased their five-year fixed mortgage rates, citing rising yields on the bond market and a strengthening economy as the main reasons for the change. The Royal Bank of Canada's five-year fixed mortgage rate is now at 5.14%, up from 4.99%, while Toronto-Dominion Bank's five-year fixed rate is also at 5.14%. The Bank of Canada may also raise its key interest rate target next week, which could lead to an increase in the prime rates offered by the big banks, and subsequently the cost of variable-rate mortgages and other loans tied to the benchmark rate. Scotiabank is also reportedly reviewing its rates and may make changes in the near future.

Banks in Canada, like banks in other countries, may raise interest rates for a variety of reasons. Some of the main factors that can influence the decision to raise rates include the state of the economy, the level of inflation, the level of demand for loans, and the overall level of risk in the financial system.

One reason that banks may raise interest rates is to help manage inflation. Inflation occurs when the overall price level in the economy rises over time. When this happens, the value of money decreases, and people may start to demand higher interest rates on their savings and loans to compensate for the loss of purchasing power. By raising interest rates, banks can help to curb inflationary pressures and maintain the value of money.

Another reason that banks may raise interest rates is to manage the level of risk in the financial system. When the economy is performing well and there is a high demand for loans, banks may raise interest rates to reduce the risk of default on those loans. This is because higher interest rates can help to reduce the number of people who are able to borrow money, which can in turn reduce the number of people who may be unable to pay back their loans.

In addition to managing inflation and risk, banks may also raise interest rates to help manage the overall level of demand for loans. When there is a high demand for loans, banks may raise interest rates to reduce the number of people who are able to borrow money. This can help to prevent the financial system from becoming overburdened with too much debt, which can lead to instability.

Despite the reasons that banks may have for raising interest rates, it is important to note that they do not always follow through on this action. In some cases, banks may decide to pivot and hold steady or even lower interest rates in response to changing economic conditions or other factors. For example, if the economy starts to slow down or if there is a sudden increase in the level of risk in the financial system, banks may decide to hold steady or lower interest rates in order to stimulate economic activity and encourage borrowing.

In conclusion, there are several reasons why banks may raise interest rates, including managing inflation, managing risk, and managing demand for loans. However, banks may also pivot and hold steady or lower interest rates in response to changing economic conditions or other factors.

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