Fri Jun 10, 2022 – 8:13 pm EDT
(LifeSiteNews) — Amid massive inflation and interest rate hikes, the Bank of Canada is warning homeowners that their mortgage payments may increase by 30 percent or more over the next few years.
The Bank of Canada, the nation’s central bank, warned those who bought homes during the COVID-19 so-called pandemic on Thursday that even the slight increase in mortgage rates that occurs when the central bank raises rates will likely result in monthly payments increasing by hundreds of dollars a month.
“Even as the average household is in better financial shape, more Canadians have stretched to buy a house during the pandemic,” Bank of Canada Governor Tiff Macklem said Thursday. “And these households are more exposed to higher interest rates and the potential for housing prices to decline.”
According to the Canadian Broadcasting Corporation, home prices increased by roughly 50 percent during the COVID-era, with artificially low interest rates allowing Canadians to leverage even more debt than before to acquire homes.
As a result, nearly one-in-five Canadian households is considered “highly indebted,” meaning their debt-to-income ratio is 350 percent or higher.
For reference, before the pandemic, only one-in-six homes were in
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