Facebook
Twitter
Pinterest
Copy Link
Interest Rate Increase
On Wednesday October 26th we are expecting another increase in the Bank of
Canada’s Prime Rate. Despite prime rate rising to 5.45% just over a month ago on
September 7th 2022, we could potentially see prime rate increase by half to
three-quarters of a percent. Along with this, most major banks are forecasting another
increase this year after the October 26th increase.
Trigger points
What is a trigger rate? A trigger rate is the rate when the regular mortgage payment
no longer covers the accrued interest. This affects those with variable rate
mortgages. This happens when interest rates have increased so much that the entire
payment is solely going towards interest and nothing is going towards the principal.
If rates were to increase more, the payments would no longer cover the full interest.
When/ if an individual hits their trigger rate the solutions would be to
increase the monthly payment, make a lump sum payment on the mortgage thus
decreasing principal, or switch to a fixed interest rate with a higher payment. Trigger
rates will vary for individuals, generally you reach your trigger point when interest rates
increase at least 2% from when you first obtained your mortgage from your lender.
Mortgage Professional: Ashley Crowhurst
With interest rates on the steady rise it is vital to get Pre-approved as soon as possible
and get rate hold if you are in the mortgage market. If you want more information on
interest rates or have any questions on mortgage financing or want to obtain mortgage
financing, please don’t hesitate to reach out. I would love to help
Realtor: Matthias Alleckna
Don’t hesitate to message me, Matthias Alleckna on Facebook or Instagram . As your local real estate professional for White Rock, Surrey and the entire Fraser Valley I am happy to lend you my expertise. Check in every week on the website blog for more engaging content.
