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Bank of Canada Raises Interest Rates
Friday, July 14, 2017
The Bank of Canada has raised the interest rate for the first time in 7 years to 0.75 per cent. The bank’s 0.25 per cent increase comes at a time when many Canadians have a lot of debt.
With an interest rate increase, you may be required to make higher monthly payments on credit products and loans. This includes personal loans, lines of credit and variable-interest rate mortgages. Fixed-rate mortgages and other loans coming up for renewal could also be impacted by the increased interest rates.
You may want to review your finances now that interest rates have increased as you may need to devote more of your household budget to debt payments.
The Financial Consumer Agency of Canada (FCAC) outlines some steps that you can take to manage your costs including:
- paying down larger debts, especially those with the highest interest rates
- making prepayments on your mortgage or accelerating mortgage payments
- cutting expenses and putting more money toward paying down debt
- avoiding taking on more debt
- setting aside savings to deal with unplanned expenses
- consolidating debts with high interest rates into a loan with a lower interest rate
You can learn more about personal finance on Settlement.Org.