By January this year, variable-rate mortgages had already fallen to 16.7 per cent, while fixed-rate mortgages with terms of more than one year but less than five years made up a 64 per cent of new and renewed mortgages, showing a continued upward trend.
Five per cent is also a lot higher than the central bank’s rate pre-pandemic, which was at 1.75 per cent heading into March 2020.People with fixed-rate mortgages who have locked in their rate and monthly payments for up to five years are also under pressure once their contracts come up for renewal. But in the meantime, at least they can prepare for what’s coming, said Cooper.
For anyone who got a mortgage at true rock bottom — the central bank lowered its policy rate to 0.25 per cent in the throes of the pandemic — the shock of this “black swan” tightening cycle has been particularly significant, Cooper said.Article content But she also sees more people opting for shorter fixed-term contracts. Few are opting for full five-year terms, which peaked in recent popularity in October 2020 at 49 per cent and were languishing at 13 per cent as of January, according to CMHC’s report.
Source: Loan Digest (loandigest.net)
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