The Bank of Canada raised its key lending rate by 50 basis points this morning, bringing it to 4.25%.

In its statement, the Bank said it “will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target.”

What happens now?

In the coming days, banks and other financial institutions are expected to follow the Bank of Canada’s lead and hike their prime lending rate, which is used to price variable-rate mortgages and personal and home equity lines of credit (HELOCs). 

This announcement will have no impact on fixed-rate mortgage holders.

This is the seventh consecutive rate increase from the Bank of Canada, which has now increased the overnight target rate by 400 bps since March. If you have any concerns about this rise in borrowing costs, I encourage you to reach out so we can discuss your personal situation and options. 

Read the Bank of Canada’s report