Hamilton and Burlington homeowners could see mortgage payments skyrocket by over $800 a month
Published November 3, 2023 at 2:32 pm
If you bought a house in the Hamilton-Burlington area in 2020, the increase in interest rates could see you paying an additional $800 a month if you were to renew your mortgage now.
Real estate website and brokerage Zoocasa says that based on its research, 2020 buyers will see a four per cent increase upon renewal. To determine how much certain buyers would be impacted by the 15-year high in interest rates, the brokerage analyzed mortgage payments on homes purchased in 2020 and 2018 to learn how much buyers have left to repay, and what their payments may be when they renew.
“One of the best available rates in September 2020 was 1.64 per cent – renewing now means paying interest at a rate of 5.24 per cent. Additionally, 2020 buyers have had two fewer years to make payments towards their principal, meaning there’s greater interest on top of the larger percentage of the original home price,” the report reads.
“The average rate in September 2018 was 3.09 per cent, so although rates have increased, the disparity isn’t quite as significant as those that locked in 2020 rates.”
For Hamilton-Burlington residents (Zoocasa groups data from the two cities together), buyers who purchased homes in 2020 at an average price of $683,000 and who are paying $2,703 on their mortgage could see their payments climb to $3,582 a month (assuming that $614,984 is left on their mortgage).
That marks an increase of $879.
Buyers who purchased in 2018 won’t get quite as much of a shock. According to Zoocasa, those who bought a home for $552,500 and who are currently paying $2,596 a month can expect to see their monthly mortgage payment climb to $2,782–a $186 difference.
Other buyers expected to be walloped by rate hikes include Vancouver buyers who bought a home for the average price of $955,000 in September 2020. If those buyers have paid under $100,000 towards the principal with average monthly mortgage payments of $3,737, they’ll now be paying $4,946 monthly–nearly $1,200 more.
Toronto is the only other city where 2020 homebuyers will be paying over $4,000 on their average mortgage payments.
Homeowners in cities such as Moncton and Saint John will fare better, with payments expected to climb by less than $300 a month.inthehammer's Editorial Standards and Policies advertising