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Effects of Rising Canada Mortgage Rate on Common Household

Rising Mortgage Rate

Homeowners with outstanding mortgages are now facing a hard time with the dramatic increase in mortgage rates. In three weeks mortgage rate went up four times, from 5% to 5.80% with no indication of going down in the months ahead.  

Cause of Rising Canada Mortgage Rate

Inflation is the major contributor to rising mortgage rates. The Bank of Canada must raise its benchmark interest rates to help curb soaring inflation. The bank warns that buyers who bought their homes during the pandemic that the impact of even slightly higher mortgage rates could be dramatic. Though the effect of inflation varies depending on personal circumstances, a household with variable mortgages or new homeowners is facing increase mortgage interest costs. Those with fixed mortgages will face rapidly rising mortgage rates upon renewal.  People who are now paying a $1,700.00 mortgage may now be paying as much as $2,800.00.  

Common effects of higher interest rates: 

  • Increased cost of borrowing  
  • Reduce disposable income and consumer spending. 
  • People and company will find it more expensive to borrow money from banks. 

All these effects will reduce inflationary pressures and reduce spending and consumer demand will often lead to decline in inflation. Which is why Bank of Canada must increase mortgage rates to achieve the country’s target of 2% in inflation rate.  

Immigrants, especially Filipinos will be hard hit by this rising Canada mortgage rate. Most Filipino household, supports not only their family here in Canada but also their extended family back in their home country.  The number one Mobile Remittance in Japan is now here in Canada. At Smiles Mobile Remittance Canada, we understand these situations, that is why we committed in giving you Everyday Great Rate. Smiles see to it that we give more value for your hard end money. We feel and we understand. Send money to your loved ones in with #HighExchangeRate, #LowRemittanceFees, #SuperSpeed.  

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Related articles:
How to use Smiles Remittance Canada to send money to the Philippines
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