Recent mortgage rate increases scare local homeowner

“The Bank of Canada has this tool called the overnight target rate, which they’re essentially using to try and combat the current inflationary issues,” said Mortgage Expert Christine Buemann. “Essentially, they’re using this to try and make it more expensive for Canadians to live so that we stop spending as much on goods and services, which is driving inflation.”

Since May, the Bank of Canada has increased rates twice, with the latest jumping a complete 1%, something new homeowners felt immediately.

“It’s getting to be kind of stressful as far as what can I afford and what changes do I need to make?” said Wiebe. “I live alone currently, and that looks like that’s going to change, which really makes me feel frustrated because I feel like I should afford to live alone.”

A solution new homeowners are considering is flipping their mortgage to a fixed rate, but experts want to make sure you consider all the options.

“If you convert to a fixed, will you be converting at a peak? Are they going to adjust back down as most pendulum shifts do,” said Buemann. “If you stay with your variable, how much more can you tolerate?”

The Bank of Canada had eight meetings scheduled for 2022 to announce its decisions for overnight rate targets. The next announcement comes on September 7.

by Jack Clark

Recent mortgage rate increases scare local homeowner

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