Rate hike increases mortgage costs

Posted on January 30th, 2018

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 Monthly cost

before rate increase (P&I)

Monthly cost

after rate increase

Annual income required

before rate increase

Annual income required

after rate increase

Median Total Household Income, 2016
Detached $1,605,800 $30,116 $1,635,916 $1,226,937 $7,128.94 $7,234.02 $285,158 $289,361 $74,266
Attached $803,700 $14,074 $817,774 $613,331 $3,563.67 $3,616.20 $142,547 $144,648 $74,266
Apartment $655,400 $11,308 $676,708 $507,531 $2,948.94 $2,992.40 $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