Bank of Canada Raises Rate by 50bpts
As expected, the Bank of Canada has raised its key lending rate by 50 basis points, bringing it to 1.50%. This will increase the prime rate we pay at the lenders, going from 3.2% to 3.7%. In its statement accompanying the decision, the Bank said, “the risk of elevated inflation becoming entrenched has risen” and that it is “prepared to act more forcefully if needed” to achieve its 2% inflation target. We all know this, inflation needs to come down and this is how it is controlled.
What loans does this affect? Variable-rate mortgages and personal and home equity lines of credit (HELOC). If you have a fixed-rate mortgage, you will see no change to your rates. We will continue to monitor developments. Please give me a call if you’re concerned and if you would like to be notified when prime changes (up or down) please sign up for our newsletter.
I know hearing this news feels like a gut punch (to me too!) but, oh yes here come Nikole's rainbows, if it helps get inflation down then we will pay less everywhere else. The Bank of Canada does not want to rock the economy, which is why they have to do this. Also remember, these meeting do not always result in increase (although somehow thats always the bigger headline). They can increase, decrease or hold.
Thanks for reading!
Mortgage Broker Edmonton, Alberta