Cost- A single 0.25 percentage point rate change moves a typical variable-rate mortgage payment by a modest, specific amount depending on loan size.
- The effect compounds meaningfully over several consecutive moves in the same direction, which is what made the 2022-2023 hiking cycle's cumulative effect so large even though each individual move looked small.
- Fixed-rate mortgages aren't affected by a Bank of Canada rate move directly at all until their term ends and they renew.
The actual math
$450,000 variable-rate mortgage, 25-year amortization
| Payment at 5.00% | $2,622/mo |
| Payment at 5.25% (+0.25 pts) | $2,682/mo |
| Difference for one 0.25% move | ~$60/mo |
On a typical mortgage, a single quarter-point move works out to roughly $55-$70 a month for every $450,000 borrowed — a real amount, but smaller than the attention each Bank of Canada announcement gets might suggest. See your own exact numbers on the mortgage payment calculator.
Why it compounds over a full cycle
The reason the 2022-2023 hiking cycle felt so dramatic wasn't any single move — it was several consecutive 0.25% to 0.5% moves stacking on top of each other over a relatively short period, eventually adding up to several hundred dollars a month on a typical mortgage. One move alone is manageable for most budgets; a rapid sequence of them, as happened during that cycle, is a different situation entirely.
Fixed-rate mortgages aren't affected until renewal
This entire calculation only applies directly to variable-rate mortgages, whose rate floats with the prime rate. A fixed-rate mortgage holder's payment doesn't change at all when the Bank of Canada moves — the effect on them only arrives at renewal, when they requalify at whatever fixed rates happen to be at that time. See our renewal shock update for what that looks like for borrowers renewing this year.
- Bank of Canada — accessed September 2026