20 Jun, 2022
Interest Rates Comments Off on How High Will Interest Rates Go?

Lately, it doesn’t matter where you are, everyone is talking about 3 things: Rising interest rates, Inflation and well…The weather of course. Housing & interest rates have been a hot topic for years, so what’s different now?

The pandemic created a perfect storm for record-low interest rates, creating fierce competition in the housing market for those looking to purchase a home. But now, with rates on the rise and the market starting to stall, Canadians are left once again worrying about housing affordability. The media has successfully done its job to instil fear in consumers about rising interest rates. So let’s go through some of these concerns together!

Frequently Asked Questions

“How would my payment change if I went from a 3% to a 5% interest rate on my mortgage?”
On a mortgage amount of $650K with a 25-year amortization, the payment would go from $3,076 to $3,780 per month. That’s a difference of $704/m.

“Can I get a 30-year mortgage?”
If you purchase with 20% down or more, you may be able to qualify for a loan over 30 years vs. The standard 25-year amortization. Alternatively, if you already own a home, you may be eligible to refinance and stretch your amortization out to 30 years. Though this will allow your payments to be smaller, remember that you will pay more interest over time.

“I can’t afford my mortgage payments, what are my options?”

You want to avoid missing payments if you can, as this will bruise your credit score & history. If you continue to miss payments, the lender has the right to foreclose on you – which means they will sell your home to pay themselves back for the mortgage you originally agreed to pay.

The first step is getting in contact with your mortgage professional, to ensure you understand your options. Click Here To Learn More

“I heard interest rates will increase to 30 or 40%! Is that true?”

The media has released plenty of articles projecting that mortgage payments could increase as much as 40%. Most people are only reading social media headlines and making wild assumptions that the interest rates will increase to 40%. Though we don’t have a crystal ball, it is very VERY unlikely that this would ever happen. What most articles are referring to is that some people may see an increase of 30% to 40% in their mortgage payment as compared to their original payment (not the interest rate itself).

Remember my 1st bullet point above about rates going from 3% to 5%? That represented an increase of roughly 23% in the monthly payment.

Use Our Free Mortgage Calculator App

  • Compare your options side by side
  • Calculate your total cost of owning a home
  • Estimate the minimum down payment you need
  • Calculate the maximum loan you can borrow
  • Stress test your mortgage
  • Estimate your closing costs
  • Calculate Land Transfer Taxes and the available rebates
  • Search for the best mortgage rates
  • Email Summary reports (PDF)

Questions To Ask Your Mortgage Broker


Understand your payment:

1. What is my interest rate?
2. What is my amortization?
3. What is the difference in payment between the current fixed & variable-rate mortgages available?
4. If I go variable rate, are my payments static or adjustable?

Understand your penalty:

1. What is my mortgage term?
2. Are lower rates available for shorter terms?
3. What if I plan on moving?
4. How is my penalty calculated

Do You Still Have Questions?

Contact Us!

c. 250-320-5555

e. info@mortgagetech.ca

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