For the first-time since the pandemic, Canadian banks are raising interest rates. Fixed Rates and Variable Rates respond to rising yield on the Canada 5-year bond. Bank of Canada is watching the housing market closely; however, they do not intend to raise the rates.
We have seen lenders increase the rates 15 to 25 basis points on 5-year terms. What does this do to your payment? According to South Surrey Mortgage Broker, Kuljit Chhaitra, website mortgage calculator @ www.southsurreymortgage.com there will be a slight increase in the payment. For example, if the down payment is 20% of a home with a purchase price of $500,000, at a 5 year fixed rate of 1.59 amortized over 25 years ($400,000 mortgage amount) has a monthly payment of $1615.72. With a 25-basis point increase, the mortgage payment will increase to $1663.08. This will cost the homeowner $47.36 per month or $568.32 on their mortgage payments
Theres no reason to panic! Rates are still low. Few things to think about:
- Get pre-approved
- Renew early
- Consolidate your debt
This will help with the rates still low. If there are any questions, email broker@southsurreymortgage.com or call me at 604-374-5870.