Interest Rates Hike Canada 2022
Interest rates have been historically low in Canada. Inflation has risen to 40 years high. To counter it and keep the inflation under control bank of Canada has taken a bold step in the right direction. Bank of Canada recently increased interest rate by a half point two times in recent months, taking it to 1.5 per cent in June.
During the pandemic interest rates were lowered to new low level by the Bank of Canada. This was to prevent everyone from the financial hardships.
Since, interest rates have a significant affect on the mortgage which further has direct impact on the home prices.
Low interest rates created a big spike in home prices breaking all the previous records. During the pandemic no one had any idea what is going on with the real estate, especially in the greater Toronto area. Real estate market was very hot. It was only in May, when the home prices took a nose down when bank of Canada increased interest rates.
Its worthwhile to mention here, Russian-Ukraine conflict, rising gas prices and post pandemic logistic issues have a strong bearing on the inflation. This has lead to increase in prices of almost everything we use in our day to day life.
At the same time, increase in interest rates, have an impact on the rental market as well. Next time if you want to renew your lease there are maximum chances your rent can go up.
Bank of Canada is likely to hike Interest Rates on July 13, 2022.
For the latest announcements and updates on Bank of Canada’s interest rates and policies, please click here.
If you have a question in mind how will this impact me financially, you may like to keep few things in mind.
This will for sure affect your finances if you have or are buying anything which carries a variable rate interest rate, like variable interest rate mortgage or loan, car loan etc. This can have financial impact. So this may be time to speak to your financial advisor or bank to lock it and see if it can save money in longer run.