Bank of Canada Rate Hikes Attention *Variable Mortgage Clients*

Well it happened again, the Bank of Canada has announced another increase to the Overnight Lending Rate... Prime will rise likely to 3.20%.
It's not the end of the world, however, I can understand that any increase in payment is not fun.

This increase represents approximately  $13 more per $100k of mortgage based on a 25 year am.
Now I'm no fortune teller, however, I would think this is the last one for a bit of time. Too fast and they could damage things.

That being said people with deeper discounts should stay the course. You're still under the lock in rate and variable mortgages ONLY come with a 3 month interest penalty. Locking in brings with it the potential for higher breakage costs; if you were to break your mortgage prior to the end of the term. This difference here could actually end up costing you thousands more.

The Bank of Canada has gone back to the future.
For the past decade, traders have been conditioned to expect central banks to both telegraph policy tweaks ahead of time and offer a thorough rationalization of those shifts at the time of implementation.
Canada’s central bank provided neither when hiking its benchmark rate to 1 per cent on Sept. 6. Monetary policy makers hadn’t spoken publicly since July 12, when they delivered their first increase in almost seven years, nor was the latest decision followed by a press conference.

There is a very informative video attached in the link with the full article below.

http://business.financialpost.com/news/economy/quick-hike-shows-data-speak-louder-than-words-canada-eco-watch