TORONTO - Two big Canadian banks have cut their residential mortgage rates as a weakening American economy puts downward pressure on general interest rates.
RBC Royal Bank lowered its rates a tenth of a point, pushing a five-year fixed loan rate at Canada's biggest bank to 5.39 per cent, effective Saturday.
A three-year rate at the Royal drops a tenth of a point to 4.35 per cent.
Meanwhile, TD Canada Trust reduced its rates a tenth of a point on most terms but lowered its three-year fixed mortgage charge by a fifth of a point to 4.25 per cent.
The reductions at Royal and TD reflect the lower cost of borrowing in the bond market, where banks finance their home loan lending.
Bond rates dropped today after investors worried the U.S. economy is recovering from the recession more slowly than expected.
Earlier today, the U.S. Labour Department reported the American economy created only 54,000 jobs during May, the weakest performance in eight months.
The U.S. jobless rate edged up a tenth of a percentage point to 9.1 per cent.
