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!! Bank of Canada hikes key interest rate to 0.50%!!

The Bank of Canada raised its benchmark interest rate to 0.5 per cent on Wednesday, a move that’s expected to be the first of a series of small rate hikes this year, in an attempt to tame the inflation that has hit a three-decade high of 5.1% in January. Canada seems to have rebounded from the pandemic-induced recession and no longer needs the emergency monetary supports that have been put into place.

It’s the first time the bank has raised its rate since 2018.


The Bank of Canada’s rate affects the rates that Canadian consumers get on things like mortgages, lines of credit, and savings accounts at their own banks.

While the bank has been telegraphing its plans to raise its rate to fight inflation for a while now, the bank acknowledged in its announcement on Wednesday, that inflation is heating up even faster than anticipated.

As a result of this decision, variable-rate mortgages interest rates (as well as Home Equity Line of Credits and Secured Line of Credits) will go up by 0.25% as variable-rate mortgages are affected by prime rate and the prime rate depends on the Bank of Canada’s interest rate.

This increase affects borrowers who have a variable rate mortgage, monthly payment will increase depending on your lender. For every $100,000 in borrowing, most Canadians will see an average $12/ month increase.

This change will not affect fixed mortgages, which tend to be strongly linked to the bond market.
The Big Five Banks have raised PRIME Rate to 2.70%, For more information, contact me today!

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