BANK OF CANADA BENCHMARK RATE RISES

Despite international trade tensions, The Bank of Canada (BoC), as of Wednesday, July 11, 2018, raised the benchmark interest rate. This is the fourth interest rate hike in the last 12 months and the BoC rate now sits at 1.5%, up from 1.25%.

Generally, it can be expected that the Big 5 Canadian Banks will follow that trend and raise their prime lending rates as well. Even though the Finance ministry anticipates a slight growth in the Canadian economy, this raise in rate will likely tighten household budgets for families with average incomes. For an example, for most borrowers, for every $100,000 of mortgage amount, the 0.25% increase in variable rate will add approximately $11* to their monthly mortgage payment based upon a 25 year amortization (*between $10.82 and $10.86).

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