Will The Bank of Canada Raise Rates on July 11?
70% Chance of a Bank of Canada Rate Hike
Given the uncertainty around NAFTA, it was generally believed there was a 50/50 chance the Bank of Canada would raise interest rates on July 11.
In a speech Thursday, Poloz told reporters he expects to continue raising interest rates even with the uncertainty around NAFTA because inflation has already hit the central bank’s 2 per cent target.
“We’ve said clearly that, given where the economy is, we’re in a situation where the economy will warrant higher interest rates,”
It is now believed there is a 70% chance of a rate hike on July 11.
What this means to Canadians is that the cost to carry variable debt is going to increase.
On a $500,000 mortgage balance currently at a 3% variable rate will have a payment increase of $63.77 per month or $765.24 annually assuming a .25% rate increase to 3.25% on a 25 year amortization.
If fluctuating payments and the prospect of higher rates don’t sit well with you, consider locking in your rate.
If consumer debt such as credit cards are making it increasing more difficult to manage your expenses on a monthly basis, consider a debt consolidation mortgage.
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