TD kicks off five-year rate cut cycle

February 13, 2020

In what some believe could be the start of a downward cycle, TD Bank has chopped its interest rate on five-year mortgage loans.
On February 4, TD cut its five-year posted rate for fixed-rate mortgages from 5.34 per cent to 4.99 per cent and its special rate to 3.09 per cent.
The decision came after a drop in the five-year government bond yield to 1.34 per cent from 1.70 per cent in mid-December.
Dominion Lending Centres chief economist Sherry Cooper hailed the TD decision as a positive step, and noted other major banks could consider taking similar steps.
“By keeping posted rates too high, the Big-Six banks have inflated the qualifying rate, making it more difficult than necessary to pass the stress test to get a mortgage.”
A concerted move by Canada’s largest banks could lead to the B-20 mortgage stress test qualifying rate dipping below 5 per cent, Cooper predicted.