Variable-rate mortgages in Canada are now averaging about 4.20%, a full percentage point higher than they were a week ago.
That’s thanks to the Bank of Canada’s latest 100-bps rate hike, which was followed by an equal increase in the prime rate, upon which variable mortgages and lines of credit are priced.
The prime rate at most lenders is now 4.70%, a level not seen since 2008, and up from 2.45% at the start of the year.
“I think the big takeaway here is what it’s going to do to the variable-rate mortgage segment,” Steve Saretsky, a Realtor at Oakwyn Realty, told BNN Bloomberg in an interview. “At the end of the day, we’ve seen a huge cohort of people—more than 60% of purchasers over the last year and a half—going [into] variable-rate mortgages.”
Saretsky added that on top of the 100-basis-point rate hike, new…
