Rising Fixed Mortgage Interest Rates In Canada

If you’re a homeowner on a fixed-rate mortgage, you may have recently noticed that mortgage lenders and banks have raised the fixed interest rate. Over the last month, many different mortgage lenders and banks have raised their fixed mortgage interest rates, which will affect your monthly mortgage payments. Worried about how these rising interest rates will affect you? Keep reading below.

RISING MORTGAGE INTEREST RATES BY BANK/LENDER

Are you wondering exactly how the rates have changed? Here are some major banks and lenders that have recently made changes to their fixed and variable rates.

TD

• 5 Year Fixed (HR): From 2.74% To 2.94%
• 5 Year Fixed: From 2.84% To 3.04%

RBC

• 5 Year Fixed: From 2.94% To 3.19%
• 3 Year Fixed: From 2.69% To 2.94%
• 5 Year Variable: From 1.65% To 1.70%

Scotiabank

• 5 Year Fixed: (HR): From 2.74% To 2.94%
• 5 Year Fixed: From 2.84% To 3.04%
• 3 Year Fixed: From 2.64% To 2.89%
• All eHome Rates Increased By 30 Basis Points (BPS)

BMO

• 5 Year Fixed (HR): From 2.82% To 2.92%
• 5 Year Fixed: From 2.99% To 3.09%
• 3 Year Fixed: From 2.69% To 2.84%

CIBC

• 5 Year Fixed (HR): From 2.82% To 2.92%
• 5 Year Fixed: From 2.99% To 3.09%

NBC

• 5 Year Fixed: From 2.94% To 3.09%

HOW WILL CHANGES TO THE FIXED MORTGAGE RATE AFFECT ME?

Many Canadians are confused about exactly how the changes in these interest rates will affect them. If you already have a mortgage, you don’t have to worry about the changes in the rates. Because your mortgage is on a fixed rate, your payments are based on what the rate was when you first signed your mortgage.

If you are looking to buy a home and are about to get a brand new mortgage, this could affect whether or not you choose to get a fixed-rate mortgage or choose a variable-rate mortgage. While fixed-rate mortgages have been extremely popular among Canadian homeowners, with the recent raises in interest rates, some Canadians are wondering whether or not it’s the right choice.

Typically, variable-rate mortgages have lower rates than fixed-rate mortgages as they’re less risky for lenders. However, depending on the market, it is sometimes less beneficial for owners to pay a premium on their fixed-rate mortgages, as they could save a chunk of money by being on the variable rate instead.

However, many Canadian homeowners prefer the security and reliability of knowing exactly how much they’ll be paying on their mortgage every month so that they can budget the right amount. Additionally, if variable rates do start to rise, having a fixed-rate mortgage can save you money in the long run.

If you’re wondering what the right choice of a mortgage type is for you or what will change for your mortgage payments with these new rates, make sure you talk to a mortgage adviser. They can advise you best on your specific case.

WHAT ABOUT MY VARIABLE RATE MORTGAGE?

If you have a variable rate mortgage, you could potentially look at an interest rate rise in the next couple of months. In addition, variable rates are forecasted to rise over the next year, so you can expect to pay more on your mortgage. Exactly how much more depends on your lender. Your mortgage adviser can help with any questions once they announce the rise in rates.

This also means that getting a variable-rate mortgage might not be the right choice for individuals looking to become new homeowners, despite the rising fixed-rate mortgages. While your mortgage adviser can’t predict exactly how the rates are going to change, they can certainly assess your situation and help you decide what the best mortgage type and terms are for lifestyle.

Have questions about the rising mortgage interest rates? Contact our team at The Mortgage Group Inc. Our experienced mortgage associates are more than happy to help answer your questions.