News says ‘Mortgage Rates Are Rising’

1.    What does this really mean?

2.    Who is affected?

3.    Does this change the amount of mortgage clients qualify for?

What does this really mean?

Fixed rates moving from say 1.59% to 1.84% translates into a monthly payment per $100K of $415.77 over $403.93 on a 25 year amortization. This is $59.20 for a loan of $500,000, which requires $100,000 of pre-tax income, monthly $6,000 after tax. 1% of monthly household income! How dramatic 1% of income is for you to decide.

Who is affected?

No one with a mortgage already in place.

Maybe people shopping for a mortgage.

First point to clear up, a word is missing from these headlines – and an explanation is missing as well. The word is fixed, specifically 5 year fixed.

You might be saying - I thought the bank of Canada said they were leaving rates alone into 2022 or 2023?

Yes, they did say so, and so far, they are doing so.

This ‘news’ is no news for variable rate mortgages.

So the news of rising rates means what to who?

Those who shop specifically for a fixed rate mortgage. One of our lenders has increased fixed rated by 0.25% and reduced variable rates by 0.25% on Feb 26, 2021.

Did you miss the boat? There is no guarantee that fixed rates will not go down, but likely slower while going down.

Does this change the amount of mortgage clients qualify for?

No, not until rates will be higher then 2.79%

You are welcome to schedule time to discuss your options from my calendar, if none of time frames works for you, please email me [email protected] or text me on my cell 604.339.1577