Interest Rates

Canada’s big banks raise their fixed mortgage rates to highest levels since 2011

By: Jessica Mach on October 10, 2018

Canada’s major banks are raising their fixed mortgage rates as bond yields reach their highest level since 2011.

The Bank of Montreal (BMO), National Bank of Canada, Royal Bank of Canada (RBC), and Toronto-Dominion Bank (TD) have all lifted fixed rates for their prime customers since the start of October, by as much as 20 basis points.

With the exception of National Bank, the banks also all raised their posted fixed rates — i.e., the non-discounted rates that banks advertise to customers prior to negotiations.

The Canadian Imperial Bank of Commerce (CIBC) hasn’t raised its special or discounted fixed rates, but has increased its posted fixed rates for its two-year and three-year deals by 10 basis points. The two-year posted fixed rate is now 3.44%, up from 3.34%. Meanwhile, the three-year posted fixed rate is 3.74%, up from 3.64%.

A representative from CIBC declined to say whether the bank will be raising its special fixed rates in the near future.

Below are the increases brought by BMO, National Bank, RBC, and TD:


Special Fixed Rates
5yr “Smart Fixed”: 3.44% to 3.59%
6yr: : 3.74% to 3.94%
Posted Fixed Rates
2yr: 3.84% to 3.99%
3yr: 4.15% to 4.29%
10yr "Smart Fixed": 4.14% to 4.49% 

National Bank 

Special Fixed Rates
4yr: 3.69% to 3.74%
5yr: 3.74% to 3.79%


Special Fixed Rates
1yr: 3.24% to 3.39%
2yr: 3.34% to 3.49%
3yr: 3.49% to 3.64%
4yr: 3.59% to 3.74%
5yr: 3.74% to 3.89%
7yr: 3.79% to 3.99%
Posted Fixed Rates
6mo: 3.49% to 3.64%
1yr: 3.49% to 3.64%
2yr: 3.74% to 3.89%
3yr: 4.30% to 4.45%


Special Fixed Rates
3yr: 3.64% to 3.84%
6yr: 3.77% to 3.97%
Posted Fixed Rates
2yr: 3.54% to 3.74%
3yr: 3.69% to 3.89%
4yr: 3.89% to 3.94%

Higher rates are never good news for homeowners — especially first-timers who are already facing home prices that, while relatively stable compared to recent years, remain acutely unaffordable for many Canadian residents. But, for the most part, banks don’t raise rates without reason. And the reason this time around seems to be an encouraging one: a strong Canadian economy-at-large.

Banks typically offer two types of mortgages: variable and fixed. While banks ultimately pull the trigger when it comes to lowering or raising rates, there are specific circumstances that will push them to make the changes to one or the other.

Variable rates are usually adjusted in response to the Bank of Canada’s (BoC) overnight rates, which the BoC changes periodically to keep inflation in check.

Meanwhile, fixed rates change according to the price of bond yields. According to, bond yields have reached their highest level since 2011. (When bond yields go up, that’s typically an indication that the economy is going strong.) The higher bond yields are, the more it costs banks to borrow money themselves. So, to compensate for their losses, banks will adjust their fixed rates — resulting in higher costs for homeowners.