Yes, the Bank of Canada raised its key lending rate by 1.00% today, as expected. This means most lenders will likely increase their prime rate to 4.70%.
With every big rate move, this increase comes with a lot of questions from homeowners about how they’ll be affected. Watch this video on what it means for your mortgage:
To review, Fixed-Rate Mortgages are not affected by this increase. However, if your mortgage is coming up for renewal in the next 6 months, let’s look into renewing as early as possible.
If you have an Adjustable Rate mortgage, your payment will increase by roughly $40 per $100,000 owed. Your lender will be in touch with the new payment amount and date.
If you have a true Variable Rate mortgage with static payments, let’s chat about your goals. It may be time to look at voluntarily increasing your mortgage payment to stay ahead of a forced payment change if/when your payment no longer covers the interest.
If you’re thinking about buying or selling your home this year, we should get you pre-approved ASAP. Not only does this give you a good idea of how much you can spend, doing this also locks in the current rate for a period of 90 to 120 days.
FYI, the next Bank of Canada Announcement will be on September 7th.
We know uncertainty can be challenging, but we’re here to help! Book a free mortgage review and let’s talk about your goals and whether you can benefit from our cash-saving strategies to ensure your monthly budget isn’t spread too thin.