Some of the talk around amongst some bankers and mortgage brokers has been around the potential negative impact to the local real estate market and more specifically, how the increased mortgage rates are impacting affordability and how for newer buyers with more limited equity in their homes are at risk of going into foreclosure.
In Vancouver, foreclosures are very uncommon and have been for the past two decades.
All that could change over the next one to three years as the cost of mortgages have more than doubled.
If you are a new home owner; further interest rate hikes are expected, even if just slightly.
It is the home owners that have bought from 2020 and 2021 that are most at risk. Owner that bought previous to that period likely have built up enough equity to help either sell or restructure (refinance).
The buyers with low equity gains or decreased equity combined with huge increases in the cost of holding their mortgages may not be able to hold on. With many people not having to adjust yet, but with mortgage renewals coming up, there could be some people in trouble.