04/14/2022
So the Bank of Canada raised its key interest rate to 1% today. The question we all might be asking at this point is "How does this impact me?"
Why they did this?
The inflation rate in Canada jumped to 5.7% in February. This means there has been a persistent increase in the average level of prices over time. In order to curb that increase, the Bank of Canada makes borrowing money more expensive which therefore reduces purchasing power.
Who's impacted?
For those who already own a home, particularly anyone holding a variable-rate mortgage, they can expect to see a direct impact on mortgage rates. This will also apply for those with personal or home equity lines of credit, as these products are directly linked to the central bank's benchmark rate. For those holding a fixed-rate mortgage, you will see the impact once you renew your mortgage.
What should I do?
Don't panic. That can seem hard to do, but assess your financial situation and determine what makes sense for you. The worst thing you can do is make a knee jerk reaction that could impact you down the road. If you have questions, please reach out and I can help answer any questions you have.
Rob
