7 November 2019

In case you don’t need to renew your mortgage in the next year or two, there’s no need to worry. The BoC believes borrowers who will renew in 2020 and 2021 will not deal with significantly higher rates, provided mortgage rates remain near today’s level.

The central bank says if you have a 5-year fixed rate and decide to renew into another 5-year fixed, you could face a rate hike by only 0.10% in 2020, and 0.25% in 2021.

In case of a 0.15% increase, your monthly payments will go up by about $7.40 for every $100,000 of mortgage, or by $700 during 5 years.

Another good way of reducing the debt costs at a renewal is paying the loan down as fast as you can. The BoC says almost 20% of households made mortgage prepayments this year.