The latest Bank of Canada interest rate hike could leave some Canadians looking to adjust their mortgages, according to one mortgage broker.

The Bank of Canada raised its policy rate by 50 basis points Wednesday, bringing the overnight rate to 4.25 per cent. The move marks the seventh consecutive interest rate hike from the central bank in its campaign to bring inflation closer to its two per cent target. 

A trigger rate is reached when a homeowner’s mortgage payment no longer covers interest accrued since the previous payment. 

“Many Canadians are approaching their trigger point, at which point you need to start looking at do I make a lump sum payment into my mortgage? Do I increase my payment amount or do I potentially switch into a fixed-rate product in order to normalize the payments and not have an amortization that is just too long,” Leah Zlatkin, a mortgage broker and expert with, said in a phone interview Dec. 7. 

Following Wednesday’s interest rate hike, prime lending rates are expected to climb above 6.45 per cent, bringing variable rates around 5.7 per cent and higher, according to a statement from Zlatkin. 

As such, a mortgage owner with a variable rate could see their payments rise by around $176 per month, to $3,716 from $3,540, according to Zlatkin. This assumes a home priced around $700,000 with a 15 per cent down payment and a 25-year amortization. 

“For many Canadians who have a variable rate mortgage, your rates are going to increase,” Zlatkin said. 

Individuals with a variable rate mortgage will be in one of two different situations, said Zlatkin. Either your payments will increase each month, or you might be hitting your trigger rate and may need to change something about your mortgage. 

“You’re going to need to pay a little bit more per month, [or] you're going to need to put a lump sum in or you're going to need to switch to a different product,” Zlatkin said. 

Individuals with a fixed-rate mortgage will be safe from the interest rate hike, according to Zlatkin. 


According to a statement from, the cumulative effects of the central bank’s interest rate hikes this year could have some mortgage payments increasing by around 55 per cent from the previous year. 

A homeowner with a five-year variable rate of 0.9 per cent, who put a 10 per cent down payment on a $748,450 home in January of 2022, would have a monthly mortgage payment of around $2,585, according to 

Following the total interest rate increase of 400 basis points during the year, that same homeowner’s mortgage payment would increase by $1,415 to $4,000, said. 


Individuals with a home equity line of credit (HELOC) could also see their payments increase. According to Zlatkin, HELOC loans are commonly set at 0.5 per cent plus prime and following Wednesday’s interest rate hike, this would bring rates from around 6.45 per cent to 6.95 per cent. 

An individual with a HELOC loan and a variable rate of 6.45 per cent on a loan of $100,000 would pay $537.50 in interest on their monthly payment, according to Zlatkin. Following the central bank’s rate increase Wednesday, the interest would rise to $579.17 on their monthly payment with a 6.95 rate.

“So when you're looking holistically at the picture that we're sitting in right now, where you're paying prime plus something for a home equity line of credit, it is probably a more expensive loan of money than a standard mortgage,” Zlatkin said.