Variable-rate mortgage payments could jump 45% by 2025
Borrowers with high loan-to-income ratios could see median increase of $1,020 in monthly payments
Published May 18, 2023 | Updated May 19, 2023
OTTAWA—Some Canadians who took out mortgages in 2020-21 could see their monthly payments jump by as much as 45 per cent in 2025-26, according to a new report.
The report, from the Canadian Centre for Policy Alternatives (CCPA), found that high loan-to-income ratio borrowers who opted for a variable-rate loan would see a median increase of $1,020 or 45 per cent in their monthly payments.
So far, many homeowners have been able to weather the sharp rise in interest rates with residential mortgage defaults remaining below 0.5 per cent. However, the CCPA report warns that this could change as interest rates continue to rise.
Mortgage payments could spike as much as 40 per cent in three years for those on variable-rate mortgages with fixed payments, while those with adjustable payments could see their rates increase by as much as 20 per cent, the report found.
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