As per the FinancialPost.com “It may be stressful to think about it but higher mortgage rates are on the horizon.”
“The questions for homeowners is whether they can handle a hike in interest rates.
Bank of Montreal says consumers should stress test their mortgages a couple of ways, considering higher interest rates and a shorter amortization period.
Canadians new to the home market can be particularly vulnerable to changes in the mortgage market.
“First-time buyers should stress-test their mortgage to ensure they are well financially prepared for home ownership and a potential upswing in interest rates, not only to manage costs but also to pay off their mortgage as soon as possible,” said Frances Hinojosa, a mortgage expert with Bank of Montreal.”
“While new governor Stephen Poloz did not raise the overnight lending rate, the Bank of Canada did indicate this past week the long-term goal is still a “gradual normalization” of rates. The overnight lending rate, which prime tracks, has an immediate impact on variable rate mortgage.
Consumers with long-term loans may already be feeling the squeeze. If you are coming up for renewal, it may be time to work in higher rates into your budget.”
This is something we’ve been warning our customers and social followers about for some time. If you need help with what to do if you think you’re going to be feeling a “squeeze”, please don’t hesitate to get in touch with us so we can help you through it.