BREAKING Bank of Canada is more worried about Canadians keeping up with their debt StephHughes95
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“More households are expected to face financial pressure in the coming years as their mortgages are renewed,” the May 18 review read. “The decline in house prices has also reduced homeowner equity, and some signs of financial stress — particularly among recent homebuyers — are beginning to appear.
Variable-rate borrowers with fixed payments are expected to see the biggest spike with payments having to increase by up to 40 per cent to keep up with their original amortization schedule, assuming they renew in 2025 or 2026. Variable-rate mortgages with variable payments have already seen a near-50 per cent increase in payments, most of which took place last year.
Fixed-rate borrowers could see the biggest spike in their mortgage payments in 2025-26 with a 20 to 25 per cent hike, according to the central bank’s simulation.
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