Fiona Anderson, Vancouver Sun
Published: Wednesday, April 26, 2006
Homeowners with variable mortgages will see their interest rates increase in response to a boost in the Bank of Canada's trendsetting overnight rate on Tuesday.
BMO Bank of Montreal and Scotiabank both announced rate increases of 0.25 percentage points, raising their three-year open rate to 5.75 per cent after the Bank of Canada said it was increasing its overnight rate by 25 basis points. All major banks also increased their prime lending rates to 5.75 per cent.
But fixed mortgage rates have remained unchanged, at least for now.
Rob Hafer, regional sales manager for Invis on Vancouver Island, said variable rates are attached to prime rates, so anyone with a variable mortgage will see rates rise. But even though fixed rate mortgages depend on a number of factors other than the prime rate, those rates have also been going up recently.
'So the costs of borrowing for all consumers is going up unless you are already locked into a [mortgage] term,' Hafer said.
And while rates go up, consumers should shop around to make sure they are getting the best deal, he said. Over the last few years, the number of lenders have steadily increased, making the market more competitive. As posted rates go up, lenders are getting more aggressive with the discounts they will offer from those posted rates, he said."