“Extremely resilient” variable-rate borrowers face latest test as prime rate rises to 7.20%

Variable-rate mortgage borrowers in Canada are facing rising interest costs as the Bank of Canada's overnight target rate increased to 7.20%, leading to a 70% rise in monthly interest costs over the past year. Despite the sharp increase, variable-rate borrowers have been resilient and found creative ways to manage the higher costs. However, there are concerns about the breaking point for borrowers if rates continue to rise. Extended amortization periods and trigger rates are becoming issues for some borrowers. There is speculation that another rate hike in September is possible, which could bring the prime rate to 7.45%, the highest since 2000.