The Bank of Canada increased its interest rate to 1.25% from 1.00%.

How will this effect mortgage holders?

All six major banks have raised their posted five-year, fixed-rate mortgage rates to 5.14 per cent from 4.99 per cent.

Mortgage costs and income required

Housing type MLS® HPI Benchmark Price, 2017 PTT Total cost Mortgage loan
Detached $1,605,800 $30,116 $1,635,916 $1,226,937
Attached $803,700 $14,074 $817,774 $613,331
Apartment $655,400 $11,308 $676,708 $507,531

 

Housing type Monthly cost before rate increase (P&I) Monthly cost after rate increase
Detached $7,128.94 $7,234.02
Attached $3,563.67 $3,616.20
Apartment $2,948.94 $2,992.40

 

Housing type Annual income required before rate increase Annual income required after rate increase Median Total Household Income, 2016
Detached $285,158 $289,361 $74,266
Attached $142,547 $144,648 $74,266
Apartment $117,957 $119,696 $74,266

 

Mortgage terms before rate increase: 75% loan, 25% downpayment, 25-years (300 months) amortization; interest rate: 4.99%

Mortgage terms after rate increase: 75% loan, 25% downpayment, 25-years (300 months) amortization; interest rate: 5.14

Sources
Bank of Canada, Policy interest rate
REBGV Stats Package as at December 31, 2017
Statistics Canada, 2016 Census, Census Profile for Vancouver CMA

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