Canadian banks drop mortgage rates for second time in a week

Most of Canada's banks lowered mortgage rates for the second time in a week on Friday, by another 0.1% in most cases. Royal Bank of Canada started off the announcements on Friday, soon followed by TD Canada Trust. The smaller Laurentian Bank and Desjardins Group joined the parade late in the afternoon, before Bank of Nova Scotia and Bank of Montreal threw in at the end of the day. "Interest rates are near historic lows, and prospects for the Bank of Canada to raise interest rates is being pushed back to later this year," said Michael Gregory, senior economist at BMO Capital Markets. All of the changes are effective June 4 except Desjardins Group, whose new rates take effect on June 6. While most of the banks took 0.1% off their rates, TD and BMO both discounted certain rates by 0.2%. With the changes, the five-year closed mortgage rate at all six banks drops to 5.39%.