“What the Bank of Canada interest rate hike means for you” via”Toronto Star”
On Wednesday July 12, Bank of Canada raised its key interest rate to 0.75 per cent, the first hike in seven years.
Here’s what that means for . . .
People with debt
Soon after the Bank’s announcement, all five major Canadian banks announced they were increasing their prime rates — the rate they use to set interest rates for variable-rate mortgages and other loans — to 2.95 per cent from 2.7 per cent, effective Thursday. Thirty per cent of mortgages in Canada do not carry a fixed interest rate.
The move will also affect home equity lines of credit and other loans linked to the Big Bank prime rates.
Bank of Canada Governor Stephen Poloz spent a lot of time Wednesday highlighting that the bank will pay close attention to how higher interest rates will impact indebted households. At a news conference, the governor said he will gauge “carefully the effects of higher interest rates on the economy.”
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