The Bank of Canada has pushed its key lending rate higher this morning to 1%. The spike is the second increase this summer and represents a doubling of the 0.5% rate that held steady for seven years. Locally the effect will be immediately felt through anticipated increases in variable rate mortgages and lines of credit. Citified.ca
Bank of Canada increases key lending rate to 1%; mortgages expected to rise by 0.25%
CITIFIED.CA STAFF
Published September 6, 2017
Updated at 12:17 PM on September 6, 2017
The Bank of Canada has increased its key interest rate from 0.75% to 1.0% this morning, a move that is expected to push variable rate mortgages and lines of credit slightly higher.
The rate hike comes less than a week following Statistics Canada’s economic update that showed the nation’s economy grew by 4.5% in the second quarter of 2017.
In a statement released by the Bank of Canada, “more broadly based and self-sustaining” economic growth was cited as the motivator behind the increase, the second 0.25% spike this summer and a sudden doubling of the 0.5% rate that held steady for two years.
The Bank, however, acknowledged that high household debt levels and the impact of interest rate increases will be closely monitored to assess “sensitivity” to rate changes, although future rate changes are anticipated by analysts as the nation's economy continues to outpace expectations.
Canada’s major banks are likely to mirror the Bank of Canada’s rate increase in the coming days with adjustments to mortgage and lending rates. C
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