How Rising Interest Rates Will Affect Homeowners

How Rising Interest Rates Will Affect Homeowners

On October 26, 2022, the Bank of Canada increased policy interest rates by 50 basis points. The Bank of Canada increased its target for the overnight rate to 3.75%, with the Bank Rate at 4% and the deposit rate at 3.75%. The Bank is also continuing its policy of quantitative tightening. Interest rates are being raised in an attempt to fight inflation and to help even out supply and demand throughout the country. But how will this interest rate increase and further anticipated interest rate increases impact current homeowners, sellers, buyers, and first-time home buyers?

How Rising Interest Rates Will Impact Different Aspects Of Calgary Real Estate

First Time Home Buyers
The first several months of 2022 saw an increase in the number of first-time home buyers, as interest rates were very low, making homes affordable. Because of this, Calgary became a strong seller's market that made it difficult for buyers to find homes for sale. During this period, house prices rose and availability was scarce, but interest rates were low enough that it was still affordable to become a first-time home buyer. Now, with the new interest rate in place and with more interest rate increases expected, the market has slowed. While this means there are more available homes for sale and less intense competition, it also means mortgage costs will increase, making homes less affordable overall and making it difficult for home buyers to be approved for a mortgage. Whether you are a first-time home buyer or not, it is highly beneficial to work with an experienced Calgary Realtor® during this time of interest rate increases. A Realtor® will be able to help you navigate the Calgary real estate market and working with a Realtor® will give you access to their network of trusted lenders so you can find the right lender for your needs even with the current high interest rates.

If you are a prospective home buyer,
read How Rising Interest Rates Could Affect Home Buyers for more details.

As interest rates rise, bank lenders are adjusting their lending rates, which will increase the amount of interest on variable-rate mortgage payments. If you have a variable mortgage rate or if your mortgage is soon up for renewal, the recent interest rate hikes will affect your payments. If you want to pay off your mortgage using your current amortization rate, you will need to pay more per mortgage payment.

Home Sellers
As interest rates rise, it is more expensive to own your home while the buyer pool grows smaller. For people looking to downsize or to otherwise sell their home, your home may take longer to sell and you may need to consider lowering your asking price. It is expected that fewer buyers will be in the market, especially compared to the last several months, and more expensive homes may sit much longer before selling as fewer people are approved by bank lenders. To make the home selling process as easy as possible, partner with an experienced Calgary Realtor®. A Realtor® will be able to help you price your home competitively, market your house effectively, leverage their network of other agents and qualified buyers, and analyze the current housing market to determine the ideal time to list your home for sale. If you’re not sure if now is the right time to sell, read Ask A Realtor®: Is Now A Good Time To Sell My Home? and speak to a qualified Realtor® for their professional insight.

The Mel Star Team Can Help You Navigate High Interest Rates

Although the rise in interest rates will impact the Calgary real estate market and raise mortgage rates, it is still possible to find the right home for purchase or to sell your home. Partnering with an experienced real estate agent will help you to access lenders, navigate selling or buying, and determine how to make your budget work within the current market conditions. Whether you are looking to buy or sell, a Mel Star team Realtor® is an invaluable asset, particularly as interest rates continue to rise. To speak with a Mel Star Realtor® to navigate the Calgary real estate market and to buy or sell your home, call 1-403-861-9944 or fill out the online contact form.


A good Realtor® will represent you during the home buying process. A real estate agent should do the following for you when buying a home:

  • Book showings
  • Provide you with search tools or search for properties on your behalf
  • Represent you well in possible multiple offer scenarios
  • Keep a calm head during negotiations
  • Diligently navigate contracts and closing

Once you’re ready to sell your home, schedule a consultation with the Mel Star team for a Comparative Market Analysis and knowledgeable advice to price your home right.

When buying a home in Calgary, you should start by checking your credit score and determining an approximate budget. Then, come talk to the team at Mel Star. We can set you up with customized property searches, show you homes, and help you negotiate a great deal when you find the home of your dreams. To get a jump on exploring the Calgary real estate market, check out our featured Calgary real estate listings here.


We are here to help and we'd love to hear from you. Call us at 1-403-861-9944 and we will be in touch shortly!


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