The Bank of Canada’s 0.25 percentage point increase in its key interest rate will raise monthly payments for homeowners with variable-rate mortgages. For a homeowner paying off a $500,000 mortgage, the increase will be about $70 per month. Economists do not rule out further tightening of monetary policy, so Canadian borrowers are advised to review their household budgets and assess their financial capacity in advance.
In Brief
- The Bank of Canada’s key interest rate has reached 2.5%.
- For a $500,000 variable-rate mortgage, the monthly payment will increase by approximately $70.
- Every $100,000 of mortgage debt with a 25-year amortization means about $14 in additional expenses per month.
- Economists anticipate at least three rate increases over the course of the year.
- Despite higher borrowing costs, the variable rate is still more competitive than the five-year fixed rate.
- Seven out of ten Multi-Prêts clients plan to review their household budgets due to inflation and rising expenses.
