The Bank of Canada raised the Bank Rate by 0.25% today. It is now at 0.50%. This is the first increase by the central bank since July 2007.
With this rise I expect all major lending institutions to rate their Prime Rates by an equivalent amount – from 2.25% to 2.50%. This means that if you are in a variable rate mortgage or have a line of credit, you will be paying more.
This is most likely a start of a series of rate increases by the Canadian central bank over the foreseeable future as the economy continues to improve. For some this may be a time to re-evaluate your debt and adjust accordingly.
The next Bank of Canada meeting is July 20, 2010.