“Because HELOC interest rates are variable, rising interest rates could make the cost of borrowing much higher than when a borrower withdrew money,” said Michael Toope, a spokesperson for the Financial Consumer Agency of Canada. Article content One observer suggested the interest-only model is akin to a credit card, although the interest rates on secured lines of credit are markedly lower. Next week’s Bank of Canada interest rate announcement is also being watched closely. Anyone with a variable rate mortgage should … budget for additional rate increases totalling one to two per cent for the remainder of the year James Laird “Anyone with a variable rate mortgage should … budget for additional rate increases totalling one to two per cent for the remainder of the year,” Laird said. Financial institutions tend to raise their prime rates in tandem with Bank of Canada hikes, though they don’t always match them.

Source: National Post April 07, 2022 11:03 UTC