Canada's five biggest banks are boosting their prime lending rates by 25 basis points after the interest rate hike of the Bank of Canada. It was the first increase by the central bank in nearly seven years.
So, how will these increases affect you if you’re currently looking to obtain or renew a mortgage?
Terry Kilakos of North East Mortgages encourages mortgage-hunters to “stay the course.” Do what you’ve been doing, including speaking to mortgage brokers at your financial institution and staying on top of the latest information about mortgage rates.
“Consumers, when they hear 25 basis points increase they panic. They think that it’s going to be the end of the world when in reality it’s not,” said Kilakos. “It shouldn’t impact (the average consumer) all that much. Like I said, maybe twenty-five, thirty dollars.”
That’s per month. It may not sound like much, but over a 20-or-25-year mortgage of $250-thousand to $300-thousand, that’s an extra $6,000 to $7,500 out of your pocket.
“People are freaking out when...the rates go up by a quarter. It doesn’t make sense.”