Mortgage rates are going up again

September 5, 2017

Canadian banks are increasing interest rates on consumer mortgages, again.

The increase shouldn’t send shockwaves through economic markets but they do signal several points of contemplation.

On one hand banks are looking to increase margins and faced with a nearly saturated credit market and a shrinking demographic there are less opportunities to entice new borrowers.  Banks have already pushed the fee envelope quite hard so a small, but mostly manageable, increase in mortgage rates will result in increased revenue.

Meanwhile, smart consumers would be well advised to think very cautiously about entering housing market.  As housing prices have been steadily increasing, so too have mortgage values and with a tiny increase in rates spread over an extended mortgage term, the cost of home ownership is rising quite dramatically relative to incomes.