Canadians who watched the cost of taking out a mortgage steadily increase over the last year were dealt another blow when the Bank of Canada upped its interest rate to 4.5 per cent Wednesday.
An interest rate hike like this one will typically bring about a lot of stress, said Leah Zlatkin, a mortgage broker with LowestRates.ca. The danger becomes when these people hit their trigger point -- when monthly mortgage payments are no longer sufficient.How much can the average variable mortgage holder expect their mortgage to rise by as a result of these changes?
Based on the Canadian Real Estate Association saying the average Canadian home sold for $626,318 last month, a variable rate of 5.25 per cent will mean monthly mortgage payments will total $3,261. At 5.5 per cent, monthly mortgage payments become about $3,341, an increase of $80 per month. Because rates have increased so substantially since they signed their current mortgage, they will now see that they likely have to qualify at a much higher rate than before."If you think that you're going to renew when you realize that the payment amounts are going to be excessive and you're not going to be able to afford it, you may need to look into refinancing," she said.
Loans Loans Latest News, Loans Loans Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: fpinvesting - 🏆 43. / 63 Read more »
Source: financialpost - 🏆 7. / 85 Read more »
Source: nationalpost - 🏆 10. / 80 Read more »
Source: financialpost - 🏆 7. / 85 Read more »