Canada's Last Two Big Banks Hike Mortgage Rates Amid Inflation Fears

CIBC and TD are the last of the Big Six banks in Canada to raise fixed mortgage rates, following similar hikes by BMO, National Bank, RBC, and Scotiabank. This move was prompted by a global bond selloff driven by fears that high energy prices will push inflation higher.

The 5-year Government of Canada bond yield hit a 52-week high on September 28, eventually easing to 3.677% the next morning. Despite this decrease, the number is still roughly 23 basis points above where it sat on September 8.

Fixed mortgage rates in Canada don't follow the Bank of Canada's policy rate, but instead track Government of Canada bond yields. This means that even though the Bank held its policy rate at 2.25% on September 2, fixed mortgage rates were already rising due to market expectations.