Interest rates on lines of credit

[Steven]

I read somewhere that TD bank increased their 5 year locked mortgage rate twice for less than 2 weeks? Is the same trend going to affect lines of credit? Are interest rate son credit lines going up as well?

[Tightwod]

Mortgage rates have more to do with forward looking guestimates of the banks economists. LOC rates (short term variable) are typically reactionary to the Bank of Canada Prime Lending rate. That said, the bank is not obligated to follow the rule. But if they don't you can take your debt elsewhere. Also, with the rate hike on the 5yr they are saying that they think Prime will be higher in five years then they thought it would be 2 weeks ago.

[Canadian]

LOC rates will follow soon enough in my opinion. First I expect another leg down in equity markets and after this happens, rates will continue rising faster than most people can imagine.

[Steven]

Originally Posted by Canadian

LOC rates will follow soon enough in my opinion. First I expect another leg down in equity markets and after this happens, rates will continue rising faster than most people can imagine.

How can you be so sure, please clarify?

[trent]

Originally Posted by Steven

How can you be so sure, please clarify?

Read about the relationship between bonds and interest rates:

http://www.gatherlittlebylittle.com/...st-rates-rise/

[Canadian]

Interest rates are at record low, and they cannot simply go lower. When interest rates are artificially low, this creates all kinds of distortions into various markets (look at housing for example). Here is another article to help you understand the link between bonds and interest rates:

http://www.canada.com/want+know+wher...695/story.html