Variable-rate mortgage holders are about to see their interest costs rise again after Canada’s Big 5 banks announced a 50-basis-point hike to prime rate on Wednesday.
This followed the Bank of Canada’s decision earlier in the day to raise its overnight target rate by 0.50% to 1.00%, citing excess demand in the economy and inflation “persisting well above target.”
Prime rate, upon which variable mortgage rates are priced, will rise to 3.20% at RBC, BMO, CIBC and Scotiabank effective Thursday.
TD Bank remains a unique case, with its mortgage prime rate priced 15 bps higher, or 3.35%, the result of an additional 15-bps hike the bank made in 2016 independent of a Bank of Canada rate move.
How much more will variable-rate holders pay?
The general rule of thumb is that for every 0.50% rate increase, monthly mortgage payments increase…
