In a bid to slow the rising rate of inflation, the Bank of Canada is increasing interest rates today.
Its prime rate is climbing from the rock bottom level of a quarter point (.25), to half a point, (.50).
Brian Golly with Smart Investor Solutions, believes this is just the beginning. Golly expects to see the rate continue to climb in the months ahead.
“So expect to be paying a little more for your variable rate mortgage, or line of credit” Golly says.
Golly says a big part of the increase is to try and slow down the hot housing market in major centres, like Toronto, Vancouver, Calgary and Montreal.
Interest rates were slashed at the start of the pandemic. but as the economy starts to recover, inflation is climbing because of supply chain issues, pushing up costs at the wholesale, and retail level.
The increase is expected to prompt the country’s big banks to raise their prime lending rates, a move that will increase the cost of loans such as variable-rate mortgages that are linked to the benchmark.
