More Canadians are renewing their mortgages at higher rates, as economy heads toward forecasted recession
More than 3 million Canadians will be facing mortgage renewal in the next 18 months 鈥� and with interest rates still at their highest level in years, many will face payments that are 30-40% higher. 鈥淚nflation has been off the charts for the past couple years, and when the Bank of Canada raises interest rates, it is to bring inflation down,鈥� explains Sebastien Betermier, Associate Professor of Finance. Yet, there is a lag before these interest rate increases have that desired effect, and mortgages are partly to blame. The interest rate increases are meant to cool the high levels of demand 鈥� partly by forcing people to devote more of their money to interest payments. Mortgages, often on fixed five-year terms in Canada, magnify the consequences as rate adjustments fully materialize during renewals. 鈥淭his is very much in line with the forecast that we will hit a recession in 2024,鈥� Betermier tells Radio Noon Quebec with Shawn Apel.
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