The Bank of Canada has raised its key interest rate to 1%, the highest amount in 20 years, and this could mean significant financial repercussions for many Canadians.
Nancy Snedon, president and licensed trustee at BDO Canada, said there was record inflation, noting that the Bank of Canada said inflation could approach six percent, which is “unprecedented.”
She also says that the base interest rate can reach two percent, first and foremost.
She says the increase in interest rates will mainly affect those with variable interest rate debt, such as equity credit lines, regular credit lines and variable interest rate mortgages.
She says many of these people will see an increase in what they pay.
She cites information from Trans Union, according to which the average HELOC is currently $ 142,000. People with an interest rate of 2.7% will pay about $ 650 on this credit line, this increase in interest rates will see that number jump to 724 dollars and even higher with further increases.
Snedon says this is a significant increase because many Canadians are “on the turning point” whether they can afford to live or not.
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