It’s not great news if you have a high level of debt.
The Bank of Canada has raised its key interest rate for the third time since last summer and to its highest level since 2009.
The lending rate is now 1.25%, up 25 basis points, which means if you have a variable mortgage or a home equity loan, you will likely be paying more interest.
The Canadian economy is operating close to its potential, inflation is close to 2%. In this context, Governing Council decided to raise the policy interest rate by 1/4 of a percentage point to 1.25%: Senior Deputy Governor Wilkins. https://t.co/0WVm0N4QZ9 pic.twitter.com/BLgkEdRFGd
— Bank of Canada (@bankofcanada) January 17, 2018
The central bank made the quarter-point jump over uncertainty surrounding the future of NAFTA.
Last week, Canada’s big banks increased their rates on five-year fixed-term mortgages anticipating today’s move by Canada’s central bank.
Royal Bank and TD Canada Trust have both boosted their prime lending rates to 3.45%.
ICYMI: Bank of Canada increases overnight rate target to 1 1/4 per cent #cdnecon https://t.co/4fK82cNqfx pic.twitter.com/tgg0j1JhCR
— Bank of Canada (@bankofcanada) January 17, 2018