Canadians scramble to get mortgage pre-approvals as rate hikes loom


Canadians are scrambling to get mortgage pre-approvals and rate holds as economists predict the pandemic-long stretch of low interest rates will soon end.

Estee Zacks says she recently noticed a surge in requests for rate holds, which freeze mortgage rates for up to 130 days.

The owner of Strategic Mortgage Solutions Inc. says her clients see the holds as a way to get a leg up on hot markets like Toronto that are favouring sellers.

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Interest rates are headed up. What it means for variable and fixed mortgage rates

CIBC Capital Markets analyst Benjamin Tal says even a one per cent increase in mortgage rates from current levels will cost an average new buyer $230 or 12 per cent more in additional monthly interest payments.

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BMO Capital Markets senior economist Robert Kavcic says five-year fixed mortgage rates are already creeping higher, but people with pre-approvals in hand probably have another month or two to buy a home.

He believes the Bank of Canada will likely hike its rates quicker and by more than most people expect, weighing on buyers.

© 2021 The Canadian Press