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Toronto-Dominion Bank (TD) logos are seen outside of a branch in Ottawa, in this file photo.© Chris Wattie / Reuters

Toronto-Dominion Bank has hiked its main mortgage rate for the third time in a month, reversing earlier plans to compete with its biggest rival on price.

TD raised the rate on its five-year fixed mortgages to 2.94 per cent, a jump of 10 basis points, or 0.1 per cent.

The change follows Royal Bank of Canada's decision in mid-November to hike its equivalent rate by 30 basis points, to 2.94 per cent. Although RBC is TD's largest competitor, TD decided not to follow suit at the time, and instead raised its own rate by 10 basis points, to 2.69 per cent.

TD also did not follow RBC's lead to institute a premium on any mortgages that take more than 25 years to pay back. When RBC hiked its rates, it implemented a new rule that made mortgages with long amortization periods more expensive by an extra 10 basis points – a first for Canada.

TD started to change course in late November. First it raised five-year fixed mortgage rates to 2.84 per cent. On the last day of the month the bank matched RBC's amortization premium – and then went even farther, instituting an extra cost for mortgages on rental properties, charging these borrowers 25 basis points more.

Now TD has gone all the way to match RBC's price change, charging its own borrowers 2.94 per cent for five-year fixed mortgages.

Lately, Canadian banks have had to re-think their mortgage rates because of moves in bond markets as well as policy changes in Ottawa.

The federal government is trying to crack down on easy lending standards that have been blamed for large increases in home prices in some markets, particularly Vancouver and Toronto. In October, Finance Minister Bill Morneau announced higher qualifying rates for mortgages with down payments of less than 20 per cent, as well as restrictions on the types of mortgages that can be covered by government-backed portfolio insurance.

Alyssa Gowing is a 27-year-old homeowner who follows a strict budget and finds creative ways to save money in order to afford her mortgage