Canadian banks have hiked their prime lending rate to 4.7 per cent — the highest it's been in more than 10 years
Earlier this month, the Bank of Canada raised its benchmark lending rate a full percentage point, prompting Canadian banks to hike their prime lending rate to 4.7 per cent — the highest it's been in more than a decade.
He says people have grave concerns about just how far the rate is going to go, especially since it's widely speculated Canada's central bank is expected to boost its rate another 0.5 to 1.0 per cent in the fall. Calla suggests that instead, people use a mortgage broker to hunt for the best deals because their services are free — they're compensated by the lender — and they can compare rates and options using just one application.
If you do lock in to avoid future rate hikes, she says be warned that you may be kicking yourself if the rates start to drop again. "The trigger point is when the interest grows so much within the mortgage payment that there no longer is any principal being paid and that you actually have a mortgage that's growing each month because the payment isn't covering the interest," said Butler.
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