It did not take long for other major banks to follow suit, by Friday afternoon both TD Bank and RBC Royal Bank were offering four-year special fixed rate mortgages at 2.99 per cent. Both offers expire in February. Toronto-Dominion Bank offer is open untilOn Wednesday, TD reduced its posted six-year rate 132 basis points to 3.79 per cent and lowered the posted seven-year fixed rate 91 basis points to 3.99 per cent.
As Investors are fleeing for safety, and Canada is seen as a beacon in the financial world, and a strong international demand for bonds from Canada's biggest major banks, and low borrowing cost for the banks has in turn allowed them to seek new customers by pushing mortgage rates to record lows at the consumer level by cutting their consumer rates.
international bond investors are gobbling up Canadian offerings at record levels because they're generally perceived as being safer than bonds from other countries.
Other banks are expected to make similar offers as they struggle with reduced borrowing by consumers.
As well, a lingering question will be how long historically low mortgage rates can sustain housing prices and sales across the country that already appear to have peaked,
The average Canadian home price will rise by only 2.8 per cent this year, Royal LePage said Thursday in its quarterly report, noting the increase would be lower than the rate of inflation.
The average selling price of a home across the country in November was $360,396, a 4.6 per cent increase over the same month last year. That's down from double-digit increases in the first part of 2011.
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