From Financial Post · Robert McLister · · 1m
Floating Mortgage Rates No Longer Risky
Bank of Canada hikes push makes floating mortgages less volatile than before.
In brief
Bank of Canada hikes push makes floating mortgages less volatile than before. Bank of Canada's 25 basis point rate increase reduces mortgage risk for borrowers. Originally reported by Financial Post.
Bank of Canada Rate Hike
Bank of Canada raised floating interest rates by 25 basis points to make homeowners' lives more expensive now but less expensive later.
Rate Impact on Mortgages
For 20-year mortgages, $13 more per $100,000 monthly payment; fixed rates add $21 more toward interest.
Expected Rate Hikes
Central bank projects 3% inflation in 2027 with market bracing for three more rate hikes next year.
Bank Rate Adjustments
Banks increased prime rates and fixed rates despite falling fixed funding costs.
Current Mortgage Rates
Three-year fixed: 4.44% insured / 4.64% uninsured; five-year fixed: 4.44% insured / 4.84% uninsured.
Rate Strategy Advice
Worried borrowers should assess math before locking in fixed rates after recent hikes.
The essence
Bank of Canada's 25 basis point rate increase reduces mortgage risk for borrowers.
