For followers of Canada’s mortgage market, that eyewatering increase in mortgage interest costs will come as little surprise. Interest rates have soared over the past 12 months, with the Bank of Canada taking an aggressive approach on its own trendsetting rate as it battles to curb rampant inflation and fixed rates also ticking upwards.

Claire Fan, an economist at RBC who authored the bank’s economic update in the wake of the latest inflation news, told Canadian Mortgage Professional that the blistering pace of mortgage interest cost appreciation had been widely anticipated, along with a sizeable increase in gasoline prices to push up energy inflation.

RBC expects the trend of spiralling mortgage cost inflation to hit its ceiling in the coming months, assuming the central bank has no further surprises up its sleeve where rate hikes are concerned.

While mortgage interest price levels are likely to remain high, the associated inflation rate is set to moderate “pretty soon,” according to Fan.

“The mortgage interest cost component, we saw that coming,” she said. “We continue to expect it to sort of pick up, but our own forecast is for it to start peaking or peak around mid-summer of 2023.