While many homeowners with variable rate mortgages and lines of credit have seen their monthly mortgage payments increase by hundreds of dollars a month, some industry analysts believe the time for rate hikes has come to an end.
"The worst is possibly behind us and I think that 2023 is going to be less painful than going through this rate hike cycle we've just gone through," James Laird, co-CEO of Ratehub.ca, a mortgage comparison website, told CTV News Toronto in an interview.
Laird said he predicts that the Bank of Canada will not raise interest rates in January or anytime in 2023.
"I think inflation data is going to come in that the bank is going to be reasonably happy with, allowing the bank to continue to hold on interest rates throughout the entire year," he said.
Victor Tran, a mortgage expert with Rates.ca, said he believes the central bank may raise rates a quarter of a per cent in January and again in March, before putting them on hold for the rest of the year.
Even if rates don't go up substantially this year, they're not expected to drop. That means some homeowners who have seen their mortgage payments increase dramatically could be forced to refinance or put their home up for sale.
"This year will be very interesting and I’m afraid, if people are running negative cash flows on their properties every month, they may be forced to sell," Tran said.
There are also mounting concerns about a possible 2023 recession that may affect interest rates.
"A recession is good news for mortgage rates. A recession would mean rates wouldn't go up, and further, and it would mean rates would have to drop to stimulate the economy," Laird said.
Interest rates are also increasing for anyone with credit issues who has to go to sub-prime or private lenders. Anyone seeking a private mortgage could see their payments double the next time they have to renew.
The Bank of Canada makes its next interest rate announcement on Jan. 25th.