The Mortgage Matchmaker

You may or may not have heard the news of TD’s decision to independently increase interest rates for closed variable rate clients. Here is the short version: What happened? Nov 1st, TD increased their internal ‘Bank (of TD) Prime’ lending rate by 0.15% - from 2.70% to 2.85%.... What does this mean to existing TD variable rate mortgage clients? It means your rate just went up by 0.15% (an interest cost increase of $12.50 per $100,000 outstanding) Has any other lender done the same? Nope, and as far as we can tell this is a first ever for any lender when it comes to closed variable rate mortgages. Traditionally banks have only raised their prime lending rates when the Bank of Canada rose its rate, although we have seen them fail to pass on all of the rate drops, as per early 2015 when the Bank of Canada cut Prime by 0.25% and the banks only cut by 0.15%....twice in a row. What does this mean if you currently have a variable rate mortgage product with TD? - The good news is that TD has a Fixed Payment Variable product, which means your effective payments will remain the same. - Although your payments will not increase, the amount of interest within that payment is, as per above Is the Bank of Canada going to raise Prime too? Highly unlikely by all current estimates. By the estimates of people far smarter than I. Will TD raise their own Prime rate further? This also seems unlikely. Will TD lower their Prime back to 2.70% to get in line with ALL other financial institutions? Perhaps if they get enough pressure from clients they will and this is where I suggest calling TD. If you want to affect change on this call TD directly. Call the local branch and ask to connect you to the branch manager directly. This is a phone call that might get some action, so it's worth a shot. We (mortgage brokers) have been making these calls too, let's be the squeaky wheel together! If you have any questions or concerns, don't hesitate to contact me anytime.

Retiring mortgage-free...is that the plan?