Article content

Royal Bank of Canada, the country’s second- largest lender by assets, said it’s raising some mortgage rates even as the costs for funding home loans declines.

Royal Bank’s special discounted rate for its five-year fixed mortgage will rise to 3.04 per cent from 3.03 per cent effective Jan. 8, the Toronto-based bank said Tuesday in a statement. A five-year variable mortgage, which is tied to the bank’s prime rate, will rise to 2.6 per cent from 2.45 per cent. The lender also raised its discounted rates for two-, three- and four-year fixed mortgages.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Royal Bank of Canada raises rates on new mortgages starting Jan. 8 Back to video

The increases come even as costs in the part of the bond market where banks fund their mortgage lending have fallen. The yield on the Government of Canada’s benchmark five-year bond touched 0.7 per cent Monday, the lowest level since August, when it hit an all-time low.