The Bank of Canada could raise its key rate by 75 basis points on Wednesday, its biggest increase since 1998.
This increase will be felt in several common appropriation areas.
“We made purchases on our mortgage to try to save,” says a passerby.
In addition to mortgage rates, credit cards, car loans and student loans will feel the effects of this increase in the key rate.
This increase will directly impact the amounts to be repaid under home loans. “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 the 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 repaying his debts. If you only make the minimum payment, you have 123 years and 8 months to reimburse, ”adds a speaker for the Cooperative Association of Family Economics, 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 that an end to the increases could come quickly.