What mortgage owners need to know about the Bank of Canada's rate hike

The Bank of Canada’s surprise decision to raise interest rates will bring about higher mortgage costs, according to experts.

Canada’s central bank announced Wednesday a move to increase the policy rate by 25 basis points to 4.75 per cent. The move went against expectations and was only anticipated by about one in five economists in a Bloomberg Survey. However, according to Bloomberg News, policymakers indicated that further rate hikes may be warranted after electing to hold rates in January.

“Those with a variable-rate mortgage and home equity line of credit (HELOC) who are already fatigued by rate hikes, will see their interest rate increase further,” James Laird, the co-chief executive officer of Ratehub.ca and president of CanWise Mortgage Lender, said in a statement Wednesday. 

“Those who have fixed payments with their variable-rate mortgage will likely exceed their trigger rate if they have not already done so. Those with variable payments will see their payments increase to absorb this rate hike.”