It’s a pricey pill to swallow, and by design, Wednesday’s hike doubles down on the affordability woes that are increasingly pushing Canadians out of the homeownership market. realestatenews interestrates finance mortgagenews mortgages
by the Canadian Real Estate Association in June, a homeowner putting 10% down on a $928,897 home with a five-year variable rate will now see their rate increase to 6.05% and their monthly payment will increase to $5,540. In other words, that homeowner will now need to shell out $127 more in monthly mortgage payments and $1,524 more per year than they would have with the benchmark rate at 4.75%.
“This could very well be the straw that breaks many borrowers’ backs,” Lauren van den Berg, President and CEO of, said in a statement on Wednesday. “Prior to today’s rate hike, the cost of mortgage borrowing had already increased close to 70% since the Bank of Canada’s initial increase last March.” In light of the new rate realities, mortgage professionals are urging borrowers up for renewal in the coming months to shop around before settling on a lender. The same goes for prospective borrowers.
“If your mortgage is up for renewal within the next year, it’s a good idea to hold a rate with a new lender now,” he says, adding that pre-approval allows Canadians to hold today’s fixed rates for up to 120 days. “If rates jump up further in the future, it should make sense to break your existing mortgage and switch to that new lender before your rate hold expires to lock in the lower rate.”
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