Are you feeling the squeeze of high mortgage interest rates? You’re not alone. As of January 2023, mortgage interest rates in Ontario have risen significantly from the record lows seen in recent years. This means that borrowing costs for those looking to purchase a home or refinance their mortgage have increased, making it more expensive to own a home.

So, what’s behind these rising interest rates? There are a few factors at play. First and foremost, the economy is improving. As unemployment is at record lows and inflation on the rise the Bank of Canada is starting to raise its benchmark interest rate. This, in turn, affects the interest rates offered by financial institutions on mortgages and other loans.
Another factor is the increased demand for homes. As more people look to purchase a home, competition for available properties is driving up prices. This, in turn, is causing lenders to charge higher interest rates to offset the increased risk of lending.

What does this mean for you if you’re in the market for a mortgage? It means that you’ll need to be prepared to pay more for your mortgage, but it doesn’t mean that homeownership is out of reach. There are still many options available for those looking to purchase a home, including government programs such as the First-Time Home Buyer Incentive. Additionally, many financial institutions offer specialized mortgage products that can help those with lower credit scores or less stable employment. Furthermore, it’s important to shop around and compare rates from different lenders, and also consider the terms and conditions of the mortgage, as well as the overall costs that are associated with the loan.
Finally, remember that interest rates will likely continue to rise in the future, so it may make sense to lock in a fixed rate mortgage now, rather than waiting for rates to go even higher. It’s important to keep in mind that this is a unique situation, and rates can change rapidly, so it’s always better to consult with a mortgage expert or a financial advisor to get a better understanding of the current mortgage market and how it may affect your financial situation.