Bank of Canada Rate Hike

The Bank of Canada (BoC) increased their over night or key lending rate by 0.25% or 25 basis points (bps) to 0.50%. This is still an absurdly low interest rate in historical terms. Some great articles by The Globe and Mail and Financial Post explain the reasoning.


The BIG question is "What does this means to you"?
Like everything else in society; this will affect your pocket book. Here is one simple example...


Now don't get scared by all these numbers, this is easy...Our 5 year closed variable rate mortgage was 2.25%(prime) - 0.60% or 1.65%. The BoC increased the rate by 0.25%; prime is now 2.50% (That's easy, right?). Our new 5 year closed variable rate mortgage is 2.50%(prime) - 0.60% or 1.90% (Rate hike, :(). Therefore, a $250,000 mortgage, 25 year amortization and a rate of 1.65% = $1,017/mo. The same mortgage @ 1.90% rate will cost you $1,047/mo. Calculations done HERE.

Last Paragraph...
The difference in monthly payment may not seem like much, but over the term of your mortgage the amount will add up. If you have questions about qualifying for variable or fixed rate mortgages I would love to hear them. Comments are welcome too! Help yourself make an informed decision, contact me through the medium of your choice anytime.

Thanks for your time,

Chad Moore
403-809-5447
yycmortgage.com
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chad@yycmortgage.com