WATCH: The Bank of Canada has raised its key lending rate to 1.75 per cent, and experts say more increases are likely to happen next year.
The Bank of Canada has raised its key lending rate to 1.75 per cent, and experts say more increases are likely to happen next year.
It’s the fifth increase since last summer.
Four major banks have also raised their prime lending rates to 3.95 per cent from 3.7 per cent.
This comes after a new trade deal between Canada, the U.S. and Mexico.
The Bank of Canada cites it as a reason for optimism about the economy.
“We’re still being quite stimulative at a time when the economy really does not seem to need it,” said Bank of Canada governor Stephen Poloz. “There are some lingering adjustment processes ongoing.”
Certified financial planner Lenore Davis recommends that homeowners switch to fixed-rate mortgages as soon as possible.
“You have to start planning your financial life by looking seriously at your cash flow,” Davis said. “What comes in and what goes out? And you need to manage what goes out because, honestly, most of us can’t manage what comes in.”