The Bank of Canada has raised its key lending rate by 0.50% on Oct 26, 2022. This will impact any borrowers with variable rate mortgages and/or secured lines of credit. Your lender will be contacting you directly to advise on any payment changes.
How does this affect my current mortgage?
If you have a variable rate mortgage or variable home equity lines of credit (HELOC’s), either your monthly payment will increase or more of the payment will be allocated to the interest instead of the principal. Your lender will communicate any increase and the effective payment date.
Fixed-rate mortgages are not tied to prime rate and are not affected.
What this means to you if you are in a Variable Rate mortgage:
- You can convert to a fixed rate,
- Stay with variable rate,
- Increase your mortgage payment (if you are in a static variable mortgage) or
- See if restructuring your current mortgage might be more beneficial (including switching lenders).
With these recent announcements of further increases to fixed and variable rates it’s nearly impossible not to feel the burden of the constant headlines of a looming recession and rising costs. Don’t get caught up in headlines. Look at your true financial picture with real numbers before considering how you feel about your situation.
Inflation is a reality, but how it affects you depends on a variety of factors including your assets, liabilities, rates, term length and cash flow.
Reach out of you have any question or if you want to discuss your particular situation