Fixed mortgage rates rise as lenders retreat from aggressive pricing

  6/4/2025 |   SHARE
Posted in Mortgage Interest Rates by Anabela Serra | Back to Main Blog Page

RBC hiked its fixed mortgage rates for the second time in May last week, but it wasn’t the only one. A growing number of lenders have continued raising pricing in recent weeks, particularly for uninsured terms.

At the same time, some lenders continue to offer limited-time discounts on select shorter terms, creating a patchwork of rate movement across the market.

RBC’s latest increases pushed its 3-, 4-, and 5-year fixed rates up another 5 basis points, bringing its 5-year fixed uninsured offering to 4.49%, up from 4.29% in March. The hikes follow a similar round of increases earlier in May.

Compared to peers, RBC now sits near the top of the pack for published special rate pricing. Among the big banks, CIBC and National Bank remain the best published deals at 4.44% for uninsured 5-year fixed terms. Broker-channel rates and select digital offerings remain available in the low-4% range—though these, too, have come under upward pressure in recent weeks.

“The market is meandering,” said rate strategist Ryan Sims. “Hikes are occurring with more intensity and speed on the uninsured bucket right now than the insured.” He noted that the 5-year Government of Canada bond yield recently tested 3.00% and fell back to the 2.81% range. “We need a massive data surprise to break out of the 2.71%–2.99% band.”

Markets are pricing just a 32% chance of a Bank of Canada cut this week, but that probability jumps to 75% by July—implying a potential shift in sentiment ahead. “Maybe tariffs take a bite out in the data? Maybe inflation comes down? Who knows,” said Sims. “But the market is clearly expecting something.”

In his latest blog, mortgage broker Dave Larock said the Bank’s ability to act is limited in the short term. “The BoC’s hands are effectively tied,” he wrote, pointing to an April rise in both CPI-Trim and CPI-Median above 3%. Still, Larock believes further easing is justified: “There are clear signs that our economy could otherwise benefit from monetary-policy stimulus.”

As CMT has previously reported, lenders are being cautious—especially when it comes to uninsured pricing. Mortgage broker Ron Butler has previously noted that lenders are raising rates to preserve margin, even in cases where funding costs haven’t increased.

Sims added that if volatility eases, more competitive pricing may return. “Lenders will feel okay to get competitive by 5 or 10 bps here or there when they have clarity that the bond market is at least stable.”

But for now, fixed mortgage pricing remains in flux—and for borrowers, rate relief may have to wait until late summer. “Summertime tends to be less volatile anyways as governments are on recess, so you don’t get major policy moves or announcements,” Sims added. “I would surmise that you could realistically expect bond markets to meander for the next 90 days—basically until Labour Day.”

Source: Canadian Mortgage Trends 

Canadian Mortgage Market, Fixed Rate Mortgages, Mortgage Consumers, Uninsured Mortgages, Variable Rate Mortgages