The Central Bank of Canada has once again raised interest rates another 0.25 points to 1.25 per cent. The recent increase occurred on January 17th, 2018. In addition, this has been the third time the central bank raised their interest rate in just over 7 months.
As a result of the central bank increasing their interest rate, Canada’s biggest banks raised their prime rate by a quarter of a percentage point. The Royal Bank of Canada was the first to make their move, increasing their prime rate to 3.25 per cent.
Following RBC, the Bank of Montreal, CIBC, Scotiabank, TD Canada Trust, National Bank, Desjardins Group, HSBC Bank Canada, Laurentian Bank of Canada and B2B Bank also raised their rates.
The Increased Interest Rate Affect on Canadians
Canadian residents with variable rate mortgages will suffer the biggest impact form the central bank increasing their interest rate. Home owners with a $400,000 variable rate loan (atomorized over 25 years) can expect to pay an additional $52 per month.
In addition, fist time homebuyers will feel the affect through increased fixed-rate mortgages. Canada’s big banks recently increased their fixed rate from 4.99 per cent to 5.14 per cent.
What to do with Increased Interest Rates
It is important that you are aware of the external political and societal factors that can affect your finances. Once you are aware of these factors, you can take the necessary actions to prevent yourself from going into debt.
For example, in understanding that the interest rate increase can potentially cost an additional $52 per month, you can find ways to compensate for that $52. You can find a way to earn an additional $52 per month, or sacrifice an unnecessary expenditure. The fact that you are now aware, gives you the power to act.
Dodick Landau Can Help
We are Licensed Insolvency Trustees with the knowledge and experience in addressing the financial issues mentioned above. Our expertise can address any financial challenges you may face, including managing credit and most importantly finding a way to reduce or eliminate overwhelming debt.
If you need help, contact us by emailing firstname.lastname@example.org or call us at 416 736 4357 (HELP). You can also book a free consultation with no obligations by filling out the contact form on our home page.
Make an appointment today for a custom-tailored solution specific to your situation. We look forward to assisting you.