The Bank of Canada’s latest full percentage point increase in its prime lending rate has many mortgage holders feeling the squeeze.
The Bank of Canada has been raising interest rates in an attempt to stem inflation rates that are at 30 year highs, but there are real fears the action could push some people into bankruptcy and trigger a recession.
Licensed insolvency trustee with Janes and Noseworthy, David Buckingham says those feeling the greatest impact are people with variable rate mortgages.
The impact is immediate. If you hold a $200,000 dollar variable rate mortgage, your payments just went up by another $150 to $175 dollars a month. On a $500,000 dollar mortgage, those minimum payments just increased by $300 to $400 dollars a month. “That’s a big chunk of change,” says Buckingham.
Add to that Lines of Credit…