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How to Make the Most of Your Buying Power While Interest Rates Rise

How to Make the Most of Your Buying Power While Interest Rates Rise

After slashing its rate to record lows at the start of the pandemic, the Bank of Canada has since raised its rate four (likely soon to be five) times since March 2022. This move is part of an aggressive campaign to fight inflation, which has risen lately to its highest levels in 40 years. 

Lenders have followed that suit, raising their rates as well, and it may have you asking – “what does this mean for my home buying power?” Here are some considerations to keep in mind as you approach a mortgage approval under the updated rates and stress test.


Now more than ever it’s very important to keep your mortgage pre-approval up to date. By having an active pre-approval you’ll not only be able to establish what you can currently afford, but it will also allow you to lock a rate in for 120 days with most lenders. This means, regardless of bank rate hikes, you’ll get to hold onto your promised rate, so long as there aren’t any changes in your application.


Traditionally, many homebuyers opt for a 5-year fixed mortgage product for its payment security, however, to maximize the amount you can qualify for, you may choose a variable rate mortgage as it has a lower qualifying stress test rate. Keep in mind that if you’re going the variable route, as the rates rise, the interest portion you pay each month increases and unless your payment is static, your monthly mortgage payment will increase too.

Aside from variable rate mortgages, 2 and 3 year fixed rates are generally below the 5% mark at the moment, so this serves as a potential advantage in comparison to the 5-year fixed rate approvals too. 


If you’re an entrepreneur, are mending your credit history or have a specialty property that you’d like to buy – know there are private mortgage lenders and credit unions that can finance unique situations and properties.

If you want to ensure your mortgage pro understands your real estate goals and offers a deep understanding of how to maximize your unique borrowing power, I can connect you with the best local industry pros. And, if you’ve already got your pre-approval in hand and want to see some homes in the Shuswap area – I am here to help. Connect with me and I can get you set up with a feed of listings that match your search criteria today.


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