Two big Canadian banks — the Royal and Bank of Montreal — cut long-term mortgage rates slightly Thursday as borrowing costs fell in the bond market. The two banks said their rates for a four-year loan will drop by one twentieth of a percentage point to 6.6 per cent, effective Friday. A five year rate drops by the same amount to 6.7 per cent. All other rates remained unchanged. The changes reflect a drop in the cost of borrowing on the bond market, where banks finance their mortgage lending. Investors expect inflationary pressures to cool and interest rates to drop as the North American economy slows down.
