Fixed mortgage rates have been increased by RBC and NBC, the most recent major banks to do so.

Earlier this week, we highlighted the upward trend of fixed mortgage rates, which has persisted throughout the week.

RBC and National Bank are the most recent additions to the list of major banks, known as the Big 6, that have increased their posted fixed rates. This follows previous rate hikes by BMO and CIBC.

RBC raised its 1- to 5-year fixed rates by 20 basis points (0.20%), while National Bank increased its 1- to 3-year rates by 10-15 bps.

Various other lenders and brokerages have also raised their fixed mortgage rates. According to MortgageLogic.news, the lowest nationally-available deep-discount 5-year fixed rates have increased by an average of 30 bps over the past two weeks.

These rate increases are attributed to the recent rise in Government of Canadian bond yields, which influences fixed mortgage rate pricing.

The rate hikes are primarily driven by the disappointing CPI data released by Statistics Canada on May 16. This data revealed an uptick in the consumer price index for April, breaking a five-month deceleration trend. Rising rents and higher mortgage interest costs were major contributors to the headline inflation rate of 4.4% in April.

The data suggests that the Bank of Canada may face challenges in reducing inflation to its target of 2%.

The increase in inflation measures and the rise in U.S. yields have heightened the probability of rate hikes, according to Rob McLister, the editor of MortgageLogic.news.

However, experts predict that rates should stabilize now that bond yields have eased.

Ryan Sims, a mortgage broker and former investment banker, believes that most of the rate increases have already been absorbed by the mortgage market. He points out that the 5-year bond yield hit a resistance level at 3.60% and has since dropped below 3.50%.

Considering the convergence of fixed and variable rates and the potential for Bank of Canada rate cuts in the near future, some borrowers are contemplating variable rates. However, McLister suggests waiting for more imminent rate cuts before considering a variable rate, as the risk/reward balance is not currently favorable.

For those interested in variable-rate products, McLister highlights that insured variable-rate mortgages, which require a down payment of less than 20%, are currently more attractive due to an approximate 50-basis point rate discount compared to uninsured counterparts.