Date Posted: July 12, 2017
Frank Napolitano opens up the discussion by explaining an increase as little as a quarter of a point ( 0.25%) could have a significant impact on Canadians who hold various loans, such as a mortgage or line of credit. Frank breaks down that a 0.25% increase to the Bank of Canada's key interest rate could result in an estimated $12 extra per month, on every $100,000 mortgage. Meaning your monthly payment can see an approximate $24 increase per month on a $200,000 mortgage.
With concerns that the Bank of Canada expects to increase its key interest rate significantly over the next 2 or 3 years by 2-3%, Frank predicts that we might not see huge increases, but several small ones, as a result of how the economy reacts to them.
What causes the Bank of Canada to increase its key rate? Frank explains how several factors contribute to the Bank of Canada's decision to increase its rate, such as: