A Saskatoon mortgage broker says the average homeowner has seen an increase in the mortgage costs of $181 per month since March.
“We’re in a situation where mortgage rates both variable and fixed had been moving faster than in the 1990s. It’s been a while since rates have moved this fast,” TMG Group’s Conrad Neufeld told CTV News.
“We’re getting daily rate changes that are coming through with multiple debt lenders saying hey, we’re raising rates tonight at midnight. So you know, if you delay even a week or two weeks to lock in a rate, you could see a higher rate and as a result, even a lower pre-qualification, just because of the rate changes.”
The average mortgage rate in Saskatoon, according to Neufeld, is $280,000 to $290,000, but the interest rate changes end up costing borrowers.
“About 12 to 15 per cent of Canadians as a whole are on some kind of adjustable-rate mortgage meaning as the interest rates changes, so too does their payment and how much have those payments risen over the last three or four months,” he said.
“You know, six months ago, we were locking in five-year fixed rates under 2%. And now they’re close to five, right? So you’re talking about a 250% change just on fixed-rate mortgages.
“Whenever you see a change in rate, for every $100,000 that you have, and for every 25 basis points or quarter-point change that you have in the Bank of Canada, it translates to about $12 to $13 worth of monthly mortgage payment,” Neufeld said.
“It doesn’t sound too bad at first until you start doing the math and realize that the change from March onward basically means that people in Saskatoon for instance on average have seen a change of about $181 per month since March.
“That’s about two to four per cent of people’s after-tax incomes going straight to the interest.”
With files from Matt Young