The Sept. 7 rate hike has pushed the prime rate up yet again in an effort to stall inflation. Will there be more rate
However, following the increase in interest rates, there was yet another reaction when more buyers moved back to fixed-rate mortgages. Fixed-rate mortgages were about 49 per cent of
, up from 43 per cent in March — the lowest proportion since the Bank of Canada started tracking the data in 2013.“Canadians and small businesses with a lot of outstanding debt incurred at a variable interest rate are big losers in this hike,” said Nikola Gradojevic, professor of finance at the University of Guelph.
This also includes Canadians who are retiring soon but are still paying their variable-rate mortgages, and those with a lot of credit card debt, he added.Article content “Because banks will adjust interest rates on cards to stabilize their interest income during the hike. However, the extent of the adjustment will also depend on borrowers’ credit scores,” Gradojevic explained.shows that the average non-mortgage debt per consumer is now $21,128, an increase of 2.4 per cent compared to Q2 2021.“The unpaid principal amount for such loans is relatively large and the resulting interest payments will increase with the interest rate hike,” said Gradojevic.
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