Bank of Canada Increases Prime Rate +0.75%: Here's the impact on monthly mortgage payments for homeowners

MONTREAL, Sept. 07, 2022 (GLOBE NEWSWIRE) -- With the news of a 0.75% interest rate hike from the Bank of Canada this morning, there is undoubtedly new worry around the impact on monthly mortgage payments. To help capture the effects of today's news and keep consumers educated, nesto, an online mortgage lender, crunched the numbers and the results are in: The monthly variable rate mortgage payment will increase by $203 in Toronto (on a $500,000 mortgage with 25-year amortization), and $140 in Montreal (on a $340,000 mortgage with 25-year amortization).

"With the latest interest rate announcement, we know that current homeowners with variable mortgages are worried about what to do," says Malik Yacoubi, nesto's CEO, "nesto's advice to those homeowners that the best thing they can do is speak with a professional. They have a choices. They can do nothing, lock-in their current variable rate to their lender's fixed rate, or renew early by locking in a new low rate from nesto. With nesto, we offer a 30 day longer lock in period than any other major lender in Canada, 150 days."

Though the housing market continues to show a favorable response to the objective of the rate hikes in slowing the market (nesto's proprietary data report showing a $20,000 decrease in new purchase median price in July), the additional interest rate increase shows the Bank of Canada is not done working towards their target inflation rate of 2%. This means, to mitigate the impact of rate hikes and inflation, locking in rates for renewing as a homeowner or taking advantage of nesto's low rate guarantee as a potential buyer, will allow consumers a pathway to savings down the line.

About nesto: Unlike other mortgage brokers or banks in Canada, nesto is Canada's first digital mortgage platform, that has core human expertise, and a transparent, convenient, technology-first property financing experience?simplified from start to finish. Visit nesto.ca for more information.

Contact info: Alivia Massimillo, [email protected]