Although variable interest rates are, as their name suggests, liable to fluctuate, the increase in mortgages is a first for many Quebecers, especially young people who have always experienced low rates.
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No less than 60,000 Desjardins members have seen their mortgage increase even though they had subscribed to a mortgage with a variable interest rate, according to Guy Cormier, President and CEO of Desjardins.
The mortgage, Quebecers’ first investment, has been particularly affected by the rise in interest rates.
“The monthly payment has increased by $600 per month on average,” Cormier said.
Desjardins teams have reportedly contacted 50,000 of those affected, suggesting that they review their budget or reorganize their payments to keep the earth above water.
“Young people are seeing inflation like this for the first time in their lives,” Mr. Cormier reported.
To support these young people whom he describes as “febrile and concerned”, the CEO of Desjardins, who as a reminder earned a remuneration of $ 4.37 million in 2021 (an increase of 37% compared to 2020), suggests increase its amortization or inject its savings for those who have them.
“Put a three or four thousand there all at once,” suggested the businessman.
“There is a panoply of solutions, but it is clear that the cost is higher”, he launched, adding that the important thing is to be “proactive”.
Mr. Cormier said he was moderately worried about the situation, because people qualified for a loan would have been qualified at a rate higher than the market rate, around 2 to 3%.
“Many people still have the ability to pay,” assured Mr. Cormier, who recalls that for almost thirty years the rates had been on a downward slope.
“No one had anticipated such a sharp rise in rates,” he justified.