The Bank of Montreal reduced its posted five-year fixed mortgage rate by 0.10 per cent to 3.89 per cent. BMO is also offering a “special” low-rate five-year fixed mortgage at 3.49 per cent.
TD Canada Trust
also cut its benchmark mortgage rates by a tenth of a point on Tuesday October 12. TD’s standard five-year fixed rate stands at 5.29 per cent and with certain promotional offers can go as low as 3.89 per cent.
Banks typically fund their fixed-rate mortgage lending from instruments tied to bond yields. The ongoing rally in the fixed-income market has meant they can to continue to offer lower rates, even though the Bank of Canada has raised its prime rate twice since June.