Homeowners with existing mortgages may wonder how recent increases to the fixed-rate mortgage rates may affect their payment terms. Although current rates for existing fixed-rate mortgages won’t be affected, those mortgages will be impacted by higher rates when the mortgages are up for renewal.
These interest rates on fixed-rate mortgages are impacted by interest rates on bonds issued by the Federal Government of Canada, not the Bank of Canada’s benchmark rate.
One thing to keep in mind is that if the central bank pushes the overnight rate higher, interest rates in the bond market are likely to rise as well.
Canadians with fixed-rate mortgages wondering how their payment will change once the mortgage is renewed simply need to figure out the mortgage amount remaining at the beginning of their next term as well as the remaining amortization. Speak with your mortgage lender to get details specific to your situation.
Get the more details about Canada’s interest rate increases and how they’re affecting Canadians here.