On Wednesday, July 12th, the Bank of Canada made the decision to increase the overnight lending rate, a key interest rate used for variable rate mortgages and other financial products, by 0.25%.
Canada’s largest lending institutions have increased their ‘prime’ rates accordingly, bringing the prime rate up to 2.95% from 2.70%. This change immediately makes Canadians’ lines of credit and variable-rate mortgages more expensive. It remains to be seen what impact this increase will have on financial products such as savings accounts and GICs.
This marks the first time since September 2010 that the Bank of Canada has moved their key interest rate up, and has decreased their key rate twice in the years since then.
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