The Bank of Canada hiked interest rates to 2.5%. How is it affecting you?

Thousands of Canadians carrying hefty mortgages are now scrambling to balance their home budgets after the Bank of Canada hiked interest rates by a full percentage point to 2.5 per cent last week.

“If I don’t receive a pay increase or maybe some supplementary income, it will be really tough,” said Kartik Soni recently as he headed back into the office from a break in downtown London, Ont.

Soni moved from Brampton to London with his family six months ago. He’s on a variable mortgage.

“In January this year, I was paying somewhere around $1,920 and now I’m paying $2,500,” said Soni of his monthly mortgage payments.

Back in January, Soni’s interest was 1.54 per cent. Now, after a series of rate hikes, it’s at 3.79.

Soni works in banking and hopes his wife will also soon land a job. “So keeping my fingers crossed if she gets a good job or maybe a decent job we’ll be able to survive. Otherwise it will be really difficult.”

The couple’s grocery bill has also nearly doubled in six months, too, said Soni, from $500 a month to a $1,000.

Soni’s colleague, Amandeep Singh, is in a similar predicament. He’s locked into a fixed rate mortgage but his term is up in six months.

“I’m scratching my head what to do because the worst is yet to come,” said Singh who moved from Manitoba to London, Ont., two months ago because his family didn’t like the winters there. The problem is that home prices are much more expensive in Ontario.

“I’m just counselling with everyone,” said Singh. “Everybody is like variable, fixed, fixed, variable. Nobody is certain because the things are so uncertain at this point of time.”

Singh figures once he negotiates the terms of his new mortgage, he’ll also be on the hook for another $500 a month.

“Going forward, it seems like we will crash,” said Singh who, like Soni, is hopeful his wife can get a better job. “She’s working remotely, but she’s looking for something bigger because we cannot survive in that.”

In an office tower across the street, Ann Leitch is also on a break.

“We bought our house during COVID, so we’re in a nice interest rate,” said Leitch. “We locked ourselves in safe and sound.”

But Leitch is still facing stresses of her own.

“Right now my dad has his house up for sale and he’s just happened to put it in at the wrong time,” she said. It’s been on the market for two weeks, she said. 

“It’s actually putting us in a bit of a panic because he’s got an apartment at a seniors residence, so this house needs to sell.”