The Bank of Canada's Mortgage Rate Hike: What You Need to Know
The Bank of Canada has announced it is raising its benchmark interest rate by a quarter of a share point. This is the fourth rate hike since July 2017, and it brings the rate to 1.50%. The central bank says the hikes are essential to keep inflation under control because the economy continues to do well. Also, find out about what is the prime rate in canada.
Mortgage Rates escalation in Canada. What does this mean for you personally? If you're currently on the market for a mortgage, you may well be wondering how this may impact your ability to obtain approved and what kind of interest rate you'll be offered. Here's the thing you need to know. Mortgage Rate Hike Impact #1: Mortgage Approval Could Be More Difficult to Get With the Bank of Canada raising rates, this could make it more challenging for a lot of to qualify for a mortgage. That's because when rates rise, so makes your monthly payment.
If you're self-employed or have variable income, this might put you prone to not being approved for a mortgage because lenders want to see that you can handle small bumps in your payments. Mortgage Rate Hike Impact #2: Your Interest Rate Will Likely Be Higher Than Expected If you're in the market for a mortgage, you are able to expect your interest rate to be greater than it could have been just a few months ago. That's because when the Bank of Canada raises rates, banks and other lenders usually follow suit soon after.
Rates are rising at the same time when home prices are actually high in many areas of the country. This means that affordability probably will become a concern for most first-time buyers and those looking to go up right into a bigger home.
In the long run The recent rate hike announced by the Bank of Canada could have an impact on individuals with variable income or who're self-employed as they fight to get approved for a mortgage.
However, when you yourself have a regular income and strong credit, now can still be a great time to purchase before rates increase again. For more details kindly visit scotiabank mortgage rates ontario.