Here at OMJ Mortgage, a big part of our job is watching the trends in mortgage rates and of course we’re on top of recent developments for you. When the Bank of Canada (BoC) raised their trend setting number a quarter-point Wednesday, we became aware the borrowing costs for millions of Canadians with private mortgages were about to go up.
Most experts believe that borrowers need to get ready for escalating costs. Although the rate has moved up five times in the last year, this increase signals the gates are open for a series of quick increases.
Mortgage Rates and Cost
Just a few hours after the BoC announcement, the costs of commercial construction residential financing went up as the country’s prime rate rose to 3.95%. Benjamin Reitzes of BMO Capital Markets is even confident enough to predict there might be more spikes in January, April and July.
Here’s what that might mean for the average Canadian with debt.
- If you’ve got a mortgage with a variable rate, your line of credit and mortgage payments will go up next payment. For the adjustable rate mortgages, that’s an increase of about $12 per $100,000.
- The fixed rate has followed suite. The mortgage rates on one of these has risen on average almost .50% from only a year ago.
A CBC poll found recently that a big number of Canadians who are carrying debt are very concerned about these increases. In fact, 75% of those that were holding some kind of debt on their home said that they were especially worried about these bumps.
With more rate increases looming, there’s more reason than ever before to do two things—pay down some debt and hire OMJ Mortgage to make sure you get the best deal possible. The mortgage rates are climbing and our professionals are here to help.
