Today the Bank of Canada is expected to raise interest rates for the first time since September, 2010. Most economists think it’s going to be a relatively small increase of one quarter of one percent. Even with that the hike, the Canadian central rate will still only be 0.75 per cent. The prime interest lending rate has been frozen for 7-years due to the unstable economy, particularly during the recession. Economic factors play into the decision to raise or lower interest rates. The bank will consider inflation numbers, housing-starts, jobs numbers and more. An increase today will have an effect on variable rate mortgages, home equity lines of credit and other loans linked to Bank of Canada prime rates. For homeowners who have locked in a fixed-rate mortgage, nothing will change until the fixed term ends and it’s time to renew.
Photo Credit: The Mortgage Professionals