5 Year Fixed 3.04%

5 Year Variable 2.40%

Interest Rate Hike Expected Wednesday, July 12, 2017

Interest Rate Hike Expected Wednesday, July 12, 2017

Date Posted: July 12, 2017

Frank Napolitano opens up the discussion by explaining an increase as little as a quarter of a point ( 0.25%) could have a significant impact on Canadians who hold various loans, such as a mortgage or line of credit. Frank breaks down that a 0.25% increase to the Bank of Canada's key interest rate could result in an estimated $12 extra per month, on every $100,000 mortgage. Meaning your monthly payment can see an approximate $24 increase per month on a $200,000 mortgage.

With concerns that the Bank of Canada expects to increase its key interest rate significantly over the next 2 or 3 years by 2-3%, Frank predicts that we might not see huge increases, but several small ones, as a result of how the economy reacts to them.

What causes the Bank of Canada to increase its key rate? Frank explains how several factors contribute to the Bank of Canada's decision to increase its rate, such as:

  • A healthy economy - The Canadian economy is in "recovery" mode, as per several economists.
  • Job creation - A strong benefit of a healthier economy is the result of job creations. The latest reports show that jobs creation is steadily increasing across the country.
  • U.S. Prime Rate - Our neighbors down south has already had their prime rate increase, with talks of future increases not far away. Canada typically likes to keep pace with the U.S..

Click here to watch the full interview on CTV News Ottawa.