marginally higher interest rates

Local mortgage broker, Oliva Brown provides below is a brief update following the Bank of Canada’s decision to raise rates this morning which was widely expected.

• The benchmark interest rate increased by 0.25% to 1.75%
• For context, an increase of 0.25 basis points per $100,000 costs about $12 per month in mortgage payments
• This decision was based on the Canadian economy continuing to operate close to its potential. The revised trade agreement (USMCA) all but solidified this decision.
• The Bank of Canada wants to continue to narrow the gap between current rates and what is considered a neutral rate (neither stimulating expansion nor curbing growth) but must do so cautiously.
• Future increases will in part be determined by how well the economy can adjust to higher rates, given the elevated household debt of Canadians.

Some quick numbers – approximate cost of borrowing per $100,000:
• Insured Mortgage (<20% down payment): $465 per month
• Uninsured Mortgage (>20% down payment): $500 per month

Don’t hesitate to contact Oliva if you have any questions.