September 07 2022
On September 7, 2022, the Bank of Canada (BoC) increased its key interest rate to 3.25% – marking the fifth rate hike since March 2022. The effects of COVID-19, continuous supply disruptions and the war in Ukraine continue to hinder economic growth and boost prices in Canada. In response, the BoC believes that tightening its monetary policy will bring demand more in line with supply.
As a result of this rate hike, new mortgage borrowers will be required to qualify at a minimum of 7%, while existing variable rate borrowers will likely see an increase in their mortgage by approximately $40 for every $100k borrowed. Read the latest news to learn more about this rate increase.
On September 7, the BoC increased its target for the overnight rate to 3.25%, announcing their intentions to continue its policy of quantitative tightening until the economy bounces back.
The BoC says global inflation remains high while the Canadian economy continues to operate in excess demand. Many economists state that the recent rate hike matches up with what they were expecting.
After slashing its rate to near zero in 2020 to stimulate the market during the pandemic, Canada's central bank is acting fast in raising lending rates to try to cool red-hot inflation – now at its highest level in decades.
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