Variable-rate mortgage borrowers enduring fastest rate hikes since 1990s

And the Bank of Canada made their life even more unpleasant Wednesday byIf bond market projections are right, mortgagors with floating rates may have to endure another 50 bps rate bump at both the July 13 and Sept. 7 central bank meetings. And likely another 50 bps more by Dec. 7.

For folks with a variable-rate mortgage , payments won’t change at all – but they’ll pay more interest and less principal going forward. Investors were so worried that they drove up Canada’s five-year bond yield 13 bps on Wednesday, despite the central bank’s rate hike of 50 bps being expected for weeks. Rising yields could push five-year fixed rates closer to 5 per cent this month.The government’s mortgage “stress test” formula currently makes it easier to get approved for a variable-rate mortgage than a more conservative five-year fixed mortgage.

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