The Bank of Canada could raise its key rate by 75 basis points on Wednesday, its largest increase since 1998.
This increase will be felt in several common credit areas.
“We put purchases on our mortgage to try to save money,” says a passer-by.
In addition to mortgage rates, these are credit cards credit, car loans and student loans, which will show the effects of this increase in the key rate.
This increase will directly impact the amounts to be repaid under mortgages. “It would be a variation in the level of mortgage payments between 26 and 39 dollars per tranche of 100,000 dollars of mortgage according to the announced increase”, popularized the mortgage manager on the Ratehub.ca site. Also, he “advises to plan two or three increases ahead, and not to rely on current increases”.
Credit card holders will also have to pay off a larger balance. The minimum payment will increase from 3 to 3.5% by August 1.
“We are not against the minimum payment being increased to finish paying off his debts. If you only make the minimum payment, you have 123 years and 8 months to repay, ”adds a speaker for the Cooperative Association of Family Economy, Francine Hamel.
The debt ratio has never been so high in Canada. It reached 186% at the end of 2021, a worrying trend. The Bank of Canada expects more hikes before the end of 2022, but some experts predict an end to the hikes could come soon.
Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my email@example.com 1-800-268-7128