Loan Digest

What the interest rate hike means for mortgage holders, home hunters

  • 📰 CP24
  • ⏱ Reading Time:
  • 45 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 21%
  • Publisher: 67%

Loans Loans Headlines News

Loans Loans Latest News,Loans Loans Headlines

The Bank of Canada hiked its key interest rate Wednesday by a quarter percentage point, bringing the rate to 4.75 per cent - the highest it's been since April 2001. The hike is aimed at quelling inflation, which has proved stubborn, not moving down quickly enough toward the central bank's target of two per cent. However, the hike is also bound to weigh on those hunting for homes or holding mortgages.

Last Updated Wednesday, June 7, 2023 3:46PM EDT

Mortgage rates tend to move in tandem with interest rates, so when one goes up, the other is likely to follow.Canadians buying homes have two kinds of mortgages they can choose between - fixed rate or variable. Fixed-rate mortgages allow borrowers to lock in the interest rate they will pay for a set amount of time, while variable-rate mortgages fluctuate with interest rates.

For those who have fixed payments on a variable rate mortgage, he predicts they will exceed their trigger rate if they haven't already - the point where your payments are no longer enough to cover all of the interest you've accrued since your last payment. This means your entire mortgage payment is covering interest, so none of it is allocated toward principal.

They can also help you explore options for increasing your payments, making lump sum payments or slowing down your payments.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 30. in LOANS

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.

Bank of Canada likely ready to start hiking interest rates againThe Bank of Canada probably isn’t done raising interest rates and they could hike again either today or in July, economists say. Read on.
Source: nationalpost - 🏆 10. / 80 Read more »

Bank of Canada likely ready to start hiking interest rates againThe Bank of Canada probably isn’t done raising interest rates and they could hike again either today or in July, economists say. Read on.
Source: fpinvesting - 🏆 43. / 63 Read more »

Bank of Canada likely ready to start hiking interest rates againThe Bank of Canada probably isn’t done raising interest rates and they could hike again either today or in July, economists say. Read on.
Source: financialpost - 🏆 7. / 85 Read more »

Bank of Canada to announce interest rate decision this morningThe Bank of Canada is set to announce its interest rate decision this morning as speculation about another rate hike heats up.
Source: CTVNews - 🏆 1. / 99 Read more »

Bank of Canada to announce interest rate decision this morning - BNN BloombergThe Bank of Canada is set to announce its interest rate decision this morning as speculation about another rate hike heats up.
Source: BNNBloomberg - 🏆 83. / 50 Read more »