The Bank of Canada increased prime rate by .25% today so Prime rate is now 6.95%. This decision comes after considering various economic factors, including inflation, the global economic recovery, and the housing market.
What does this mean for variable rate mortgage holders?
If your mortgage is with a lender that adjusts the payment when prime rate changes your payment will be increasing and you will be notified when prime rate changes.
For every $100,000 mortgage your payment will increase by approximately $17/month by a prime increase of .25%
E.g. if your mortgage is $400,000 your payment will increase by $68/month.
If your mortgage is with a lender that does not adjust the payment when prime rate changes your payment amount will remain the same, however the amount that goes towards principal and interest will be adjusted accordingly. This would increase the amortization.
The likelihood that we will see a further increase July 12th is more than 60% and potentially another increase in December.
Here is the history of prime. https://www.mcap.com/Prime-Rate-History
Information provided by Sheryl Elsom https://www.sherylelsommortgages.com
The next scheduled Bank of Canada rate announcement is Wednesday July 12, 2023.
Official Press Release HERE
Please do not hesitate to contact me should you have any questions or would like to discuss further.