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The B of C’s Effect on Variable Rates

Speculation is that the Bank of Canada is planning at least two rate hikes this year of 1/4% each.

Here’s a table that shows approximately how much payments would increase on a typical variable rate mortgage with a 1/4 point rate hike.  It’s based on the current average variable rate of 5.15%, amortized over 25 years.

Mortgage Amount Payment Increase
$100,000 $590.17 to 604.58 = $14.41
$200,000 $1180.35 to 1209.17= $28.82
$300,000 $1770.52 to 1813.75= $43.23
$400,000 $2360.69 to 2418.33= $57.64
$500,000 $2950.87 to 3022.92= $72.05
$600,000 $3541.04 to 3627.5= $86.46

Some lenders offer a “hold your payment” feature to keep your variable rate mortgage payment from increasing if rates rise.  However, the portion of your payments going to interest will jump–decreasing the amount you pay towards principle.