Many homeowners whose mortgages are up for renewal can expect mortgage payments to increase between 30 and 40 per cent — something that very few people can absorb and face a bad case of “interest rate shock.”
Private lenders charge considerably higher rates than the big banks and additional fees that increase the cost of borrowing, which means this sector is particularly vulnerable. It’s a good sign that rates are going down, but they aren’t going to sink to the heady pandemic levels (a.k.a. “free money”) anytime soon and will severely impact a good block of mortgage renewals going through now.