Maple Ridge homeowners experiencing financial pain from rising mortgage rates will be watching as the Bank of Canada announces changes to the key interest rates on Jan. 25.
Economists are predicting another increase of a quarter of a percentage point this Wednesday, as the bank continues to attempt to bring down rising inflation.
Since the spring of 2022, the Bank of Canada has increased interest rates a full four per cent, up to 4.25 per cent. It has created financial hardships for homeowners carrying high debt loads. Some of those on variable interest rates ranted and vented in social media, on the Albion Neighbours website in recent months.
It kicked off with a post that said: “Ugh, I want to cry now. We got continuous advice from our mortgage broker to keep our variable mortgage, through all rate hikes now. Our mortgage payment has gone up $1,200 a month. Crazy and making me so scared.”
The poster went on to say she feels stuck, and that these are “scary times.”
That resulted in 95 responses discussing the situation, and revealing the poster was not alone in her situation, or response to it.
“We are in the exact same circumstance. I wake up every day and regret, sick about it. We had never done variable before. Now people are saying ‘just hang in there.’ Well, $1,200 a month more than what we signed up for is a hard pill to swallow. I pray every day that somewhere the Bank of Canada interest rate people wake up and realize they are killing the economy. No one can buy. People are terrified of losing their homes. Things are too expensive. Here’s hoping we all make it through.”
Another woman talked about the advice she has been getting, and how it made her feel: “Our mortgage is up in seven months and my banker said that rates should be peaking soon (one more hike) and then should be coming down near the end of 2023… now with that being said… she did also say she couldn’t say for sure. I’d hold tight as long as you can afford it. It’s tough, but in the end, you most likely will benefit from it. We are worried too and I’ve been almost sick to my stomach.”
Maple Ridge mortgage broker Donna Telep said these situations, where mortgage payments are up as much as $1,200, are some of the worst cases, in her experience.
As mortgage rates started to climb, and more increases were predicted in the media, many homeowners on variable rates locked in.
Most of her clients are not seeing increases of more than $1,000, but they do fret about increases half that size.
“People are worried, and they phone,” said Telep, but added most are not feeling desperate yet.
“It’s an extremely unusual situation,” she said. “We haven’t seen rate increases like this in years.”
She expects that rates will go up 25 basis points on Wednesday, then level off, as the pundits predict.
Telep said new clients have become a rarity for all brokers.
“It’s very, very slow right now in the mortgage business.”
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