More Canadians are renewing their mortgages at higher rates, as economy heads toward forecasted recession

Published: 12 December 2023

More than 3 million Canadians will be facing mortgage renewal in the next 18 months – and with interest rates still at their highest level in years, many will face payments that are 30-40% higher. “Inflation 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,” 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 – 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. “This is very much in line with the forecast that we will hit a recession in 2024,” Betermier tells Radio Noon Quebec with Shawn Apel.


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