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Mortgage Rate Increase and What it Means for Toronto Real Estate

Canadian Mortgage Rates

 

A few days ago, 4 of the biggest 6 banks in Canada (TD, RBC, CIBC, and the National Bank of Canada) have increased their mortgage rates by 0.1% – 0.45%. One of the causes of this hike is the rising borrowing costs for the banks themselves.

 

How does this Affect Real Estate in Toronto

 

What does this Mean for Homebuyers

 

If you’re looking to buy real estate in Toronto, this likely won’t affect the rate of your mortgage. This increase is for the banks’ “official” or posted mortgage rates and not for the rates that are available to most well-qualified homebuyers.

On the other hand, this does mean that passing the recently implemented stress-test will become harder. The stress test benchmark level is based on the average posted rates of the six biggest banks in Canada.

 

What does this mean for Homeowners

 

The existing homeowners could be affected when:

  • trying to switch mortgage providers since they also have to pass the stress rate
  • wanting to pay off their fixed mortgage early, as they could face higher penalties

 

Get more information on this mortgage increase.

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