The Bank of Canada raised interest rates today for the first time in seven years. The rate went up from 0.5% to 0.75% but analysts believe this is only the beginning.
The increase will immediately affect people who have variable mortgages and lines of credit but so far it’s a small increase and shouldn’t be too much for most people to afford.
Bank of Canada Governor Stephen Poloz says interest rates went to historic lows in 2015 to make up for plunging oil prices and the country doesn’t need that much stimulus anymore.
Mortgage broker Greg Eade says the hike will mean about $20 a month on a $100 000 line of credit, about $40 a month on a $300 000 mortgage.
Poloz says the Bank of Canada will decide quarter by quarter, based on incoming data, whether to raise rates further. Marvin Ryder doesn’t think that will happen until early next year.
The five biggest Canadian banks all raised their interest rates by a quarter per cent today and the dollar is higher than it’s been in a year.