THE CANADIAN PRESS

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TORONTO - One of Canada's biggest mortgage lenders, TD Canada Trust, is increasing the interest rate charged for its home equity line of credit and variable-interest mortgages.

The bank has been charging its prime rate for its Home Equity Lines of Credit - which uses the value of the customer's home as collateral - but will start charging one percentage point above prime.

TD Canada Trust (TSX:TD) is also increasing the rates for its open and closed variable-rate mortgages to one percentage point above prime, effective Tuesday.

The prime rate at TD and most major Canadian banks has been 4.75 per cent since April, the last time the Bank of Canada changed its target for its overnight lending rate.

With the change, TD customers who have borrowed under those lines of credits or variable mortgages will be paying an annual rate of 5.75 per cent unless the prime rate changes again.

Banks around the world, including in Canada, are finding it more expensive to borrow money on wholesale markets, due to the turmoil in the U.S. financial sector.