So long as you don’t live under a rock, then you likely saw the the Bank of Canada increased the interest rate by another 0.25% last week. This directly impacts homeowners that have variable rate mortgages and/or home equity lines of credit.
This came as a surprise to many (not all though), as Bond market investors had projected this increase to come in July.
Many understand the hike was to control inflation and also slow the real estate momentum that we have experienced over the past several months. Since January (the last rate hike), the market has seen increased activity as ‘the Bank’s research shows that consumer inflation expectations are heavily influenced by house prices’.
If you are in the market as a Buyer, ensure you understand you borrowing power, from my time in the market with current and active buyers, a 3 year fixed rate is seemingly the safest route. But every mortgage is different depending on the variables at hand, so it is important to understand what will work best for you.