86% Concerned About Variable Rates

As of December,?HALF of variable-rate mortgages have hit their trigger rates, with?payments up as much as 20-30% for borrowers who have gone over their trigger rates. This is a result of the Bank of Canada hiking rates 7 times in the last 9 months by over 4.25%, making the new prime lending rate 4.5%.

A variable rate mortgage is one where the interest rates change with the market but the monthly payments are always the same. And an adjustable rate mortgage is one where the monthly payments can change when the interest rate change

According to Matrix Mortgage Global's Linkedin Survey Results based on 29 votes from professional service providers in the real estate and financial services, 55% said their clients were 'freaking out' and 33% said that there was 'noticeable concern' over increasing monthly payments.

While?for SOME borrower's payments have been staying the same as these rate increases have happened, they are no longer paying down the principal of their mortgage, only covering interest.

So what should borrowers do about it?

First, we recommend you speak to your bank and or mortgage professional about switching or refinancing your mortgage.

Depending on whether or not your mortgage is 'conventional' (non-CMHC insured) or High-Ratio (CMHC-Insured mortgage), that will make a big difference on what your new rate will look like.

Current variable rates on high-ratio mortgage are cheaper than the conventional side. For instance, a high ratio mortgage with B2B on a 5 year term is Prime - 0.8% while conventional is Prime - 0.1%.

Each borrower's situation is different. With that said, we do recommend taking a shorter term as the rates are expected to decline in late 2023.

If you have any questions or would like to discuss your option, reach out to one of our licensed mortgage professionals at Matrix by calling 1.855.55.FUNDS or emailing [email protected].