A Mortgage Scenario: How Variable Mortgage Payments Have Changed in 2022
On 7 December, 2022, the Bank of Canada hiked its key interest rate by 50 basis points to 4.25%, the seventh consecutive rate hike in 2022. The highest it has been since January 2008. An increase in the overnight rate has an immediate impact on the homeowners with a variable rate. Here is a mortgage scenario:
As the following figure illustrates, the monthly payment had an approximate increase of $1,500 from January to December in 2022 in this example.
If you have a variable rate mortgage with fixed payments, you may want to check with your lender and/or broker to find out what is your Triger rate.
What is a Triger Rate? Check this out:
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