Several Canadian financial institutions have lowered their residential mortgage rates across a broad range of products to take effect at the end of this week.
The reductions on one to five year fixed-rate mortgages range from 0.25% to 1%. The companies lowering rates included Royal Bank of Canada, Bank of Montreal and Desjardins Securities.
The move comes as a decision by the federal government to buy $25 billion in mortgages from the domestic banks received a broad welcome in the finance industry. 'Talk of a further increase to this amount is encouraging,' said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.
More intense competition among mortgage lenders could lead to an easing of the effects of the global slowdown, it is hoped.
'One thing we have learned in the past year and half is not to celebrate too early that the credit squeeze is coming to an end, but lower mortgage rates are an encouraging sign,' said Porter.
Royal Bank of Canada has also introduced three new special mortgage rate offers allowing customers to select between short and long-term options. The special offers are for one-year and four-year fixed closed mortgages.
A five-year variable closed mortgage is for homeowners 'who want exposure to potentially favourable rate fluctuations, but with the opportunity to convert to a fixed-rate,' the bank said.
