As expected, the Bank of Canada raised it’s overnight interest rate this morning by .25%. This affects mortgage holders that have Home Equity Lines of Credit (HELOCs) or Variable or Adjustable Rate Mortgages. Those rates will also go up by a corresponding .25%. The typical bank Prime rates have gone from 6% to 6.25%.
As we mentioned in a previous article, this may have an impact on your payments, but thankfully, not a large one….
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This table gives you an idea of what a .25% increase will mean to you.
With further variable rate increases expected in the fall, maybe it’s time to consider a change from a Variable or Adjustable rate mortgage to a nice fixed-rate mortgage that is guaranteed not to change for 5, 7, or even 10 years! They can be a great way to save money in a rising rate environment and a good secure way to know exactly what your payments will be. Give us a call if you would like to explore those options.
An article with further analysis of this can be found here.