The most at-risk Canadians for increasing monthly payments are borrowers with a high loan-to-income ratio variable-rate mortgages, however, the overall increase in monthly payments for all mortgage types originating in 2020-2021 could be around 30%.

“These households will see the largest rate increase because they took out a mortgage when rates were at or near record lows. This is particularly true of the historically large number of households that opted for variable-rate mortgages,” the Bank of Canada release says.

The Bank of Canada governor Tiff Macklem said that higher interest rates are needed.

“We think the economy needs higher interest rates, and it can certainly handle higher interest rates,” he said.

Speaking about the housing market, Macklem said “The increases in housing prices we’ve seen have been unsustainably elevated and we are expecting to see some moderation in housing activity and frankly, that would be healthy.”