Business · Economy · 4 hrs ago
A possible Bank of Canada rate hike could raise borrowing costs
The Bank of Canada is widely expected to raise its key rate on Wednesday, though the decision has not yet been made.
The bank usually changes rates by a quarter of a percentage point, and even a small increase can affect borrowing costs across Canada.
For example, a quarter-point rise could add about $82 a month to payments on a variable-rate mortgage based on the national average home price.
People with balances on variable-rate lines of credit or some car loans could also pay more interest.
Borrowers renewing mortgages may face higher monthly payments, especially if they are moving on from low rates secured in 2021 or 2022.
The bank is widely expected to raise rates multiple times in 2027, so people choosing a mortgage now may need to weigh lower variable rates against the possibility of further increases.
The Bank of Canada is widely expected to raise its trendsetting interest rate on Wednesday, though any increase is expected to be small.
A quarter-percentage-point hike could raise payments for people with variable-rate mortgages and other variable-rate borrowing.
For a mortgage example based on the national average home price, the article estimates a quarter-point increase would add $82 a month.
Borrowers renewing mortgages or shopping for one could face difficult choices as rates rise.
Some borrowers with lines of credit and variable-rate car loans could also pay more, while the article says higher rates could make low-rate vehicle financing deals harder to find.
- Who
- The Bank of Canada is expected to raise its rate. Borrowers and savers could be affected.
- What
- A possible rate hike could change borrowing costs across the economy, including mortgage and line-of-credit payments.
- When
- Wednesday, according to the article.
- Where
- Canada.
- Why
- Not stated.
This story does not have two clearly opposing sides.
This story does not have a timeline yet.
- Expected decision
- Bank of Canada rate hike on Wednesday
- Typical rate adjustment
- A quarter of a percentage point
- Mortgage example
- $82 more per month after a quarter-point hike
- Average HELOC balance
- Just under $59,000
- Vehicle loan balance
- $58,500 average for dealership-arranged auto loans in September
What people are saying
a significant increase in their monthly payments