Source: The Canadian Press

Mortgage rates are headed higher again as two of Canada’s big banks bump up the cost of borrowing to buy a house.

The Royal Bank of Canada and TD Canada Trust say they are raising the cost on a broad range of mortgage loans by between 15-hundredths and a quarter point.

The changes are effective Tuesday.

The third mortgage rate increases in recent weeks reflect the rising costs of borrowing on the bond market, where banks finance their mortgage lending.

Bond investors are demanding higher interest rates to part with their money because they expect rising inflation will eat away at bond returns in future.

At the Royal, a three-year closed mortgage rises to 4.75%, while a five-year rate increases to 6.25% and a 10-year loan jumps to 7.2%.

At TD Canada Trust, a three-year closed term jumps a quarter point to 5.1%, while a five-year rate increases by 15-hundredths of a point to 6.25%.

In the last month or so, mortgage rates linked to the bond market have risen nearly a full point in three separate rate hikes.

Mortgage loans tied to the prime rate have held steady so far but are expected to rise this summer if the Bank of Canada as expected raises its key rate and the banks follow with prime rate increases of their own.