Mortgage brokers say homeowners with variable-rate mortgages will be squeezed even further next week, as the Bank of Canada is widely expected to raise the country’s key lending rate as part of its continued efforts to curb rapidly rising inflation.
The rate adjustment is scheduled for Dec. 7, and if it happens the way most are predicting, it will be the seventh such hike in the prime rate since March.
Variable rate mortgages, where payments are linked to the rise and fall of the country’s key lending rate, account for about a third of all mortgage debt in the country, according to the Bank of Canada.
They grew in popularity during the COVID-19 pandemic, as housing prices soared while interest rates were close to zero — keeping many buyers’ payments significantly lower than if they were to choose a fixed-rate mortgage.
Now that interest rates are rising, and home prices are falling,…