The Bank of Canada Increased mortgage rates once again. On Wednesday, September 6th, 2017, interest rates were increased another 0.25 per cent. As a result, the Bank of Canada’s rate increased from 0.75 per cent to 1.0 per cent.
Lines of credit and variable rate mortgages were increased on July 12th for the first time in 7 years. As a result, the Bank of Canada’s interest rate increased 0.25 per cent to 0.75 per cent. For more information, you can read our previous article, ‘Mortgage Rates Are on The Rise.’
Why, the Bank of Canada Made the Decision
The Bank of Canada’s decision to increase its interest rate is based on Canada’s current economic state. A report released at the end of August presented data on Canada’s economic growth for the second quarter of 2017.
The report revealed that Canada’s economy experienced a growth rate of approximately 4.5 per cent during the second quarter. In retrospect, this is the highest increase since the fourth quarter of 2011.
Another factor that attributed to the increase in interest rates is the affect of the United States has on Canada. It was stated by the National Bank Chief Economist, Stefane Marion, that Canada can not justify having an interest rate lower than the U.S.
The Post Affects
The rate increase can result in an additional $50 payment for an average $480,000 variable rate mortgage. In addition, for higher mortgages of around $670,000, the interest rate increase could result in an approximate additional $80 payment.
With talk of another interest rate increase coming soon, it is very important that you have your finances under control. If you find that you are in a position of financial instability, then it is best you seek some professional help.
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