People are finding it hard to believe what the several recent interest rate hikes have turned their Variable mortgages into.
Peter Routledge, head of Canada’s banking regulator, warned in September that this category of borrowers, which total about $369 billion of the $2.1 trillion of outstanding mortgage market, are “at risk of suffering a significant payment shock,” and that he hopes to see the option offered less.
Now, with interest rates increasingly expected to stay higher for longer, many of the homeowners who locked in low rates years ago are likely bracing themselves for financial pain as their mortgage comes up for renewal.
As things stand now, “only $23 goes to pay the capital of my mortgage and the rest is all in interest,” he told CBC News in an interview. “And my mortgage went from 25 years to 47.”
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