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  • Writer's pictureDarrel Elver

TD Bank slashes posted rate

According to Gerv Tacadena, this may be some welcome news!.

TD Bank slashes posted rate

By Gerv Tacadena 6 FEB 2020SHARE📷 TD Bank has lowered its five-year posted fixed mortgage rate from 5.34% to 4.99%. A bank spokesperson told BNN Bloomberg that this move aligns TD's five-year fixed posted rate more closely with current customer rates. "Based on current market conditions, lower funding costs have led to a growing variance in customer rates versus posted rates," a bank spokesperson told BNN Bloomberg. This came amid concerns surrounding coronavirus, which resulted in many investors buying more government-backed bonds. This has lowered the five-year government bond yield from 1.6% to 1.34% If the other big banks follow suit, this could compel the Bank of Canada to lower the benchmark rate to below 5% for the first time since the stress test rules were adopted. This move spells good news for many would-be homebuyers and refinancers who are struggling to qualify at the current benchmark rate of 5.19%. Lowering the stress test rate by 20 basis points could translate to a 2% boost in Canadians' borrowing power, said Sherry Cooper, chief economist at Dominion Lending Centres. This would also mean that it would take 1.8% less income to qualify for a mortgage on the average Canadian home price, assuming a 20% down payment. "This doesn't sound like much, but it can have a meaningful psychological impact on already improving housing markets. A lower stress test rate would make a busy spring housing market even more active," Cooper said. Related Stor

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