What mortgage owners need to know about the Bank of Canada hike
BNN Bloomberg
The latest Bank of Canada interest rate hike could leave some Canadians looking to adjust their mortgages, according to one mortgage broker.
The Bank of Canada raised its policy rate by 50 basis points Wednesday, bringing the overnight rate to 4.25 per cent. The move marks the seventh consecutive interest rate hike from the central bank in its campaign to bring inflation closer to its two per cent target.
A trigger rate is reached when a homeowner’s mortgage payment no longer covers interest accrued since the previous payment.
“Many Canadians are approaching their trigger point, at which point you need to start looking at do I make a lump sum payment into my mortgage? Do I increase my payment amount or do I potentially switch into a fixed-rate product in order to normalize the payments and not have an amortization that is just too long,” Leah Zlatkin, a mortgage broker and expert with LowestRates.ca, said in a phone interview Dec. 7.
