Interest rates and your mortgage

Why a few percent changes everything

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In this lesson

See how interest rates set mortgage payments and buying power, and how the central bank and bond market move them.

Key takeaways

Small rate changes make big differences to mortgage payments and borrowing power.
Variable mortgage rates follow the central bank's policy rate (through prime).
Fixed mortgage rates follow government bond yields, especially the 5-year bond.
Canada's mortgage stress test checks borrowers could pay at a higher rate. Rules change — always check the current ones.

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Next lesson: Central banks and housing

Educational information only - not financial advice.

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