In a recent report released by the Parliamentary Budget Office on financial vulnerability and household indebtedness, calculations on the effect of higher interest rates on loan service costs were provided for Canadian consumers. The office reports that an increase from 2.9 per cent to 4.8 per cent, spread from the first quarter of 2017 to the last quarter of 2021, will be applied on interest rates for mortgages. Non-mortgage debt, on the other hand, is expected to rise from 5.4 per cent to 7.6 per cent over the same course of time.

This increase in the current interest rates, if not mitigated, will result in a very challenging scenario for consumers, as well as impact the overall economy of the country, as seen from the point of view of a mortgage broker.

Call Us Today +1 866 921 8890

Questions? We’re here to help!

Mortgage Offers

...pick the one thats right for you.

Find Out More

We Pay Your Legal Fees!

When You Close a Mortgage With Us

WE PAY YOUT LEGAL FEES,
$1000 VALUE

Get $1000 Cash Back

When You Close a Mortgage With us

RECEIVE $1000
CASH BACK

$1000 Referral Fee

When They Close a Mortgage With us

REFER A FRIEND AND GET
$1000

Featured Rates

FIXED

LenderRateTerm
Mortgage Lendwise RateLendwise

3.40%

5-Year
Mortgage First National Bank RateFirst National Financial

3.59%

4-Year
Mortgage RMG RateRMG Mortgages

3.29%

3-Year
Mortgage Street Capital RateStreet Capital Bank

3.19%

2-Year
Mortgage TD Bank RateTD Bank

3.19%

1-Year

VARIABLE

TermRate
5-Year Variable

2.75%

3-Year Variable

3.35%

OTHER

TypeRate
Line of CreditStarting at

3.00%

Equity LoansStarting at

5.99%

Private MortgagesStarting at

5.99%

Do You Have Financial Stability?

A Possible Scenario, But…

This sharp increase in the interest rates is just one of the possible scenarios predicted by the PBO to be highly likely to occur. But still, this is just an assumption and there is no real guarantee that it will occur. Other probable scenarios will result to varying impact estimates.

The PBO forecast seems to be similar to the ones released by major banks during the past years wherein an increase in interest between 1.5 points to 2 for the next couple of years was predicted. The prediction has been proven wrong, but the forecast continues to follow the pattern.

This current forecast also looks like a mean reversion, according to expert mortgage brokers because the PBO is not able to provide a believable argument to its recent prediction on the increase on the bond rate’s decade benchmark. Another report from the office stated a revised upward outlook on interest rates which seem to reflect the higher-than-anticipated rates from the United States. No hard facts are provided that support the high increase in the interest rates.

Possible Mitigating Factors

Service costs for debts, as calculated by the PBO, includes the ¾ obligated mortgage payments, required fees on the amortization contracts, and the monthly minimum payments applicable to other debt types.

In reality, a high percentage of mortgage borrowers are paying more than what is required. PBO assumes that borrowers are obliged to settle $76 billion but according to a mortgage report, borrowers are paying $105 billion, or a positive difference of almost $30 billion. There is room for adjustment on the borrowers’ side if PBO’s forecast becomes a reality.

Also, principals of mortgages are being settled at a rapid rate because of the current low interest rates. In fact, more than half of the principal repayment is covered by the borrower’s initial payment. This means that in five years, around 15 per cent of the principal would have already been paid. In the event of an increase in the interest rates, there’s still room for payment rescheduling.

Conclusion

Although it may be true that interest rates will increase in the future, facts don’t support PBO’s numbers. There is no way to forecast the actual amount but the resilience of the borrowers’ financial situation is enough to mitigate the impact.

OUR CUSTOMERS LOVE US

My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Linderman Beadles
Linderman Beadles
06:16 26 Feb 18
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Gina Carroll
Gina Carroll
05:06 28 Feb 18
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Deane Laflamme
Deane Laflamme
04:40 27 Feb 18
My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Stephnie Boyles
Stephnie Boyles
13:59 15 Nov 17
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Billye Peralta
Billye Peralta
13:38 19 Nov 17
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Moore Hoover
Moore Hoover
02:25 16 Nov 17
We worked with Leon and he provided a thorough and a professional process in re-financing our mortgage. Communication was consistent, he was easy to reach and documents were processed quickly. Most importantly, we got a great rate that has us savings hundreds of dollars per month on our home. These guys really know what they're doing.
Melissa Brown
Melissa Brown
00:12 18 Jul 17
As third time home buyers we couldn't be happier with the service we got from Certified mortgage broker. The team did a great job working on our loan. Everything was fast, easy and transparent. Probably the best mortgage experience i’ve ever had.
Riley Clements
Riley Clements
15:27 20 Jul 17

CONTACT US

Give us a call or email us to schedule your appointment