Bank of Canada - Interest Rate Hike
Signs are pointing towards Bank of Canada raising its benchmark interest rate possibly as soon as next week.
Eight times a year the Bank of Canada's board of governors meet to assess the latest economic indicators and decide whether Canada's economy needs to rate cut, rates stay the same or increase interest rates.
This will be the first time in 54 meetings that it is looking like they will decide on a rate increase. We have all be warned that our historical interest rates would go back up eventually. It won't be a drastic rate hike, most likely 0.25% to 0.75% but that will be enough for many households to feel the squeeze. Canadians now owe $1.67 for every dollar in income they earn and on average owe more than $22,000 on top of their mortgage.
If you currently have a variable interest rate and are holding long term, now would be the time to considering locking in a rate. If you are planning on selling in the near future you will mostly likely be better off staying in a variable mortgage to avoid payout penalties (unless you are porting your mortgage).
Lake Okanagan Realty Ltd.
Tel: (250) 870-2792