The Bank of Canada announced today that it is increasing the overnight rate .25 per cent given bolstered confidence in the Bank’s outlook for economic growth. This increase was widely expected by most economists.
The Bank noted that very strong first quarter growth will moderate for the rest of the year but will “remain above potential.” Given the improved outlook, the Bank deems that “withdrawal of some of the monetary policy stimulus in the economy” is warranted. The next rate-setting day is September 6th.
Homeowners with variable-rate mortgages will likely see their rate increase along with a possible modest payment increase; lines of credit will be similarly affected. Keep in mind that any slight increase will likely still keep your variable rate below current fixed-term mortgage rates.
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