Interest rate increases this year have been so steep that Canadians renewing their mortgages in the next six months could face larger payments, even if they’ve been hacking away at their principal for years.
For years, borrowers coming to the end of their mortgage term would face rates that were marginally higher at worst and considerably lower at best, said Ron Butler, mortgage broker at Butler Mortgage Inc.
Now, though, soaring interest rates mean many homeowners are contending with significantly higher borrowing costs at renewal, he added.
“I don’t think the public has seen this for a very, very long time,” Mr. Butler said.
For example, take the hypothetical case of a Toronto homeowner who bought an averaged-priced home in the city for $822,510 in July, 2017, with 20 per cent down. Back then, the…