As many economists expected, the Bank of Canada announced today that it is increasing the overnight rate .25 per cent, the fourth increase since last summer, given strong economic improvements. The economy and job market are performing well, housing is beginning to stabilize, oil prices have gone up, exports are strong and businesses are spending. The Bank also wants to keep inflation near target. The Bank “will continue to take a gradual approach” to further increases and is certainly watching the affect of ongoing tariff disputes and the “economy’s adjustment to higher interest rates.” The next rate-setting day is September 5th.
Homeowners with variable-rate mortgages will see their rate increase along with a possible modest payment increase. Lines of credit will be similarly affected. Get in touch if you have a variable-rate mortgage and have questions about your mortgage strategy and whether you should lock in or not. Lenders remain aggressive with their pricing for variable rate mortgages