Government controlling mortgage rates?

Finance Minister Jim Flaherty is coming under fire for using his position to pressure a private sector mortgage lender to raise its interest rates, an action that will increase borrowing costs for Canadians.

Flaherty admitted to calling up BMO to ask them to stop advertising their 2.99% 5 year fixed rate (NO FRILLS mortgage). Also he admitted he asked a member of his staff to phone Manulife Financial Corp. after it had cut its posted rate for five-year fixed mortgages to 2.89 per cent from 3.09 per cent.

“That’s Banana Republic behaviour,” said NDP Leader Tom Mulcair, who added the minister has no business interfering with the free marketplace.

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