If you currently have a mortgage, your payment will change approximately $12 - $13 for every $100,000 that you owe on your mortgage for every 0.25% change in prime rate.
If you have a mortgage balance of $500,000 and the Bank of Canada changes their overnight rate by 0.25%, that’s an increase / decrease of about $60 to your monthly payment. Note, a typical increase made by the BoC is 0.25%.
If your interest rate were to double – that would mean your payment would increase by 25%.
If your interest rate were to triple – that would mean your payment would increase by 45%.
A 1.5% increase in annual income is enough to cover a doubling in rates or in other words a 25% increase in your monthly payment 5 years later (income taxes included)
A 3% increase in annual income is enough to cover a tripling in rates or in other words a 45% increase in your monthly payment 5 years later (income taxes included)