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Comment by kaycebasques | Hacker News Reader

Canada homeowners have a lot of adjustable-rate mortgages, right? How are these rate increases playing out? Is there any data on the percentage of homeowners who are past the fixed-rate initial period and are therefore immediately seeing the rate hikes reflected in their bills?

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The article discusses this and says that the average homeowner is paying $1200 extra per year now.

Oddly the average mortgage payment, according to that article, is around $4300. Lot of expensive homes in Canada, I guess. (I only pay $3200 in New York City, at 6.5%!)

To be fair, that's about the same with the exchange rate, but the fact that the average mortgage cost across all of Canada is the same as one of the most expensive US markets is telling.

I'm looking for different data than what the article presents. The article mentions what a hypothetical owner that is past the fixed-rate grace period pays. I am looking for the percentage of homeowners overall that actually falls into that bucket that feels these rate hikes immediately.

For example, if (hypothetically) 100% of the adjustable rate mortgages were opened last year, and they all had a 7-year fixed-rate grace period, then the rate hike doesn't actually affect any of them right now.

I am not sure but another reason could be the mortgage duration. In US 30-year is very common, according to my quick google search in Canada most mortgages are limited to a 25-year amortization period.

25 year amortization period, but even most "fixed rate" mortgages are only fixed for a 5 year term, at which point you have to renew at the prevailing rate.

You can get a 10 year fixed rate but you'll pay a substantially higher interest.

So many people with a fixed rate are still forced to renew for another term at a much higher rate right now.

But as you mentioned, the shorter total duration probably explains part of the differential as well. That, and very high property prices in many parts of the country.

Maybe you know but just wanted to add even with the 25 year amortization period the interest rate only stays fixed for 5 years (for most people).

The people on variable vs fixed change over time but I think on average it is around 70% 5 year fixed, 30% variable rate

>How are these rate increases playing out?

There are people whose payments are no longer covering interest, and hence amortization is growing, causing the watchdog to change rules:

https://financialpost.com/real-estate/mortgages/osfi-negativ...

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