(OTTAWA) Interest rate hikes will be more painful for new homeowners who bought their homes through variable-rate mortgages, Bank of Canada Deputy Governor Carolyn Rogers noted Tuesday.
Speaking at a speech to Young Canadians in Finance in Ottawa, the senior deputy governor said the proportion of households with variable rate mortgages has increased over the past year.
According to new central bank research, variable-rate mortgages now account for about a third of all mortgage debt in the country, up from about a fifth of the total at the end of 2019.
In the prepared text of her speech, the Deputy Governor says mortgage costs have already risen for some Canadians and warns they are likely to rise for others as well, making homeownership more expensive.
Additionally, M.me Rogers said risks to Canada’s financial stability were high due to high levels of household debt and rising interest rates.
Despite everything, the Deputy Governor of the Bank of Canada expects the financial system as a whole to be able to withstand this period of stress and remain resilient.