So long, historically low mortgage rates

Toronto-Dominion Bank and Royal Bank of Canada have raised their mortgage rates ahead of schedule, putting an early end to record-low rates.

The banks offered five-year mortgages at 2.99 per cent, specials that were a boon to home buyers and revealed increasing competitiveness among Canada’s big banks.

They debuted at a time when the housing market is poised to slow down and the Bank of Canada has been warning heavily indebted consumers to do the same.

TD raised its special four-year closed fixed rate mortgage by 40 basis points to 3.39 per cent, effective Wednesday.

Related: Lines of credit rates rising 

At the same time, it is introducing a special five-year closed fixed rate mortgage at 4.04 per cent.

The bank’s five-year closed mortgage now stands 10 basis points higher at 5.24 per cent.

TD had said it would offer the special rates until Feb. 29.

“Rates can go up and down depending on market conditions,” said TD spokesperson Tamar Nersesian. “While we’ve kept this offer available as long as we could, the new rate reflects rising bond yields and the subsequent increase in the cost of funds.”

Royal Bank of Canada made similar changes to its rates on Monday. The new rates also took effect Wednesday.

“Our long term funding costs have gone up considerably due to global economic concerns and while we have held off in passing on these rate changes to our clients, it is now necessary for us to increase this mortgage rate,” said Royal Bank spokesperson Matt Gierasimczuk.

Related: How to ensure you don't buy the wrong house 

RBC cut its rate to 2.99 per cent in January in response to a similar cut from the Bank of Montreal, whose offer has since expired.