Rising mortgage rates, NO PANIC! 80% of Var Mortgage in Canada on FIXED payments until…

By: Kevin Chan

Rising mortgage rates, NO PANIC! 80% of Var Mortgage in Canada on FIXED payments until…

Tags: Interest Rates, Bank of Canada

According to central bank data 80% of Variable Mortgages in Canada are on Fixed payments. (as per Globe & Mail).This is helpful to help household budgets manageable as mortgage rates rise due to rapidly increasing BOC rates.  A higher proportion of the mortgage payment goes towards paying interest and less principal as rates rise.

 

UNTIL… you hit your TRIGGER RATE at which point your monthly payments is no longer enough to pay the interest portion of your mortgage & thus your payments will be recalculated.

 

The rapidly rising rates may not even affect some home owners In some cases if your trigger rate is high enough that it may not even have any impact.

 

Know what your Trigger Rate is & speak to your Mortgage professional to help manage your monthly cash flow.