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    The Bank of Canada is rapidly raising interest rates in an effort to reduce inflation, cool the demand for goods and services and in turn, make everyday life more affordable for Canadians. For homeowners with a variable rate mortgage, we understand there may be uncertainty about the impact rising rates will have on your mortgage and finances.

    This page will help you to understand the effect of rising interest rates on your mortgage and the options available to you as a WealthONE client.

    WealthONE Variable Rate Mortgages

    If you hold a WealthONE Variable Rate Mortgage, part of your regular mortgage payment is applied to your mortgage principal and the other part is applied to accrued interest on the principal.

    What happens when rates change:

    • When rates increase, your scheduled payment does not increase – rather, more of your payment is allocated to the accrued interest, and less to the principal.
    • When rates decrease, more of your payment is allocated towards paying down the principal of your mortgage.
    • When less of your payment is applied to your principal, your amortization* will increase, which means it will take longer to pay off your mortgage.
    • When it’s time to renew your mortgage, your amortization schedule will be brought back to its original timeline. In the case where a rising prime rate has resulted in less of your payment being applied to your principal balance, your mortgage payment will likely increase at the time of renewal.

    Your Options as a Variable Rate Mortgage Holder

    Increase your mortgage principal payment

    By increasing your mortgage principal payment, you can reduce the amortization. There are two ways to increase your payment:

    • Increase your scheduled payment by 20%**
    • Prepay 20% of your original principal mortgage amount each year**

    You can proceed with any of these options by calling us at 1-866-392-1088, Monday to Friday, 9 AM to 5 PM (EST).

    Switch to a fixed rate mortgage

    You can switch from a variable rate mortgage to a fixed rate mortgage equal to or greater than your remaining term at any time at current fixed rates.

    This option may appeal to homeowners who feel more comfortable with a fixed rate that is locked in, protecting against any future rate changes within your term and keeping your amortization timeline on track. No new credit application is required.

    To learn more about this option, book an appointment online or call us.

    Other Things to Consider

    Triggering Interest Rate

    In some cases, an increase in the WealthONE Prime Rate*** may result in a Triggering Interest Rate. This is when your regular payment is no longer enough to cover the interest portion on your mortgage. If this event occurs, your mortgage payment will automatically increase to cover the accrued interest. Affected clients will automatically receive a Payment Change Notice advising of the increase.

    *Amortization period: The total length of time it will take you to pay off your mortgage.

    **Once each calendar year, over the term of your mortgage loan, you may increase your regular monthly payment on account of principal and interest by 20% of the original regular mortgage payment. This prepayment privilege is not cumulative from year to year.

    You may prepay up to 20% of the original principal amount of your mortgage once in every 12-month period. The prepayment is applied directly to the principal of your mortgage.

    ***Today's WealthONE Prime Rate is 5.95%. WealthONE Prime Rate is an annual variable rate of interest announced by Wealth One Bank of Canada from time to time as its prime rate.