Our friends at Mortgage Wellness have their finger on the pulse of interest rates in Canada. With their help and knowledge, we have been able to provide you with five current facts about the most recent increase. As many of you may have heard, on December 7th the Bank of Canada raised its benchmark interest rate for the seventh time this year in an effort to cool rising inflation in the country.
1) Prime Rate is now 6.45%, at the beginning of the year the prime rate started at 2.45%.
2) The increase was .5%. The increased cost of borrowing for those with a variable rate mortgage, adjustable rate mortgage or home equity line of credit is $500 per year for every $100,000 of borrowed money. For example, if you have a $300,000 mortgage you could expect your cost of borrowing to increase by $1500 dollars a year or about $125 per month.
3) This increase only affects those with a variable rate mortgage, adjustable rate mortgage or home equity line of credit.
4) If you have a fixed rate mortgage, you’ll see no change to your rate or payment whatsoever.
5) Most people think that this is the end of increases from the Bank of Canada. However, articles suggest that we will see one more increase in 2023 before we start to see cuts at the end of 2023.
If you have questions, we suggest you reach out to our good friends at Mortgage Wellness. If you are in need of a pre-approval, help with your mortgage or just have an inquiry, we are lucky to have Mike Moore and Shannon Houde in our office throughout the week here at 255 King St in Midland.
View Mortgage Wellness’ 5 things you need to know video here.
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