Bank of Canada hikes interest rate to 1.75%

With trade uncertainty now in the past between Canada and the US, the Bank of Canada raised its interest rate for the fifth time since the summer of 2017.

The interest rate is now 1.75%, the highest it’s been in more than a decade.

While it’s only a quarter of a point, experts predict that there will be many more in the near future, causing financial stress for consumers.

If you have a closed or fixed mortgage, you won’t have to worry about this increase until you renegotiate your mortgage. But a CIBC report in April suggested that nearly half of all mortgages in Canada will need to be refinanced this year.

In the last 18 months the interest rate has gone up 1.25% On a $300,000 mortgage that adds $3750 per year to your mortgage payments.

All the major banks in Canada have followed suit, raising their prime lending rates to 3.95% but that is still considered below the Canadian historic average.

We’ll likely see another interest rate hike in March.