The Bank of Canada\u0027s interest rate affects the cost of borrowing money for loans such as mortgages and HELOCs. Raising the rate is a tool
The decisions the bank makes affect how you go about spending your money. It also affects how businesses set their prices.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc.
The Bank of Canada establishes its policy interest rate, or overnight rate, as a means to control inflation.Article content The higher it costs for banks to lend and borrow money between themselves, the higher you’ll pay in interest when borrowing. As the overnight rate goes down, you can expect to pay less in interest as well.The target overnight rate is determined by the rate of inflation and how the economy is performing.
If the economy isn’t growing — if consumers aren’t spending and businesses are faltering — the bank will lower the interest rate. This incentivises Canadians to spend more money, and even borrow at lower rates therefore boosting the economy.Article content
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FP Explains: Behind the Bank of Canada’s surprize 50 bps rate hikeFinancial Post reporter Stephanie Hughes breaks down the Bank of Canada\u0027s October interest rate hike. Watch here.
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Canadian banks raise prime rate to 5.95% after Bank of Canada hikeCanada\u0027s commercial banks began announcing hikes to their prime rate after the Bank of Canada raised its key interest rate. Read on
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FP Explains: Behind the Bank of Canada’s surprize 50 bps rate hikeFinancial Post reporter Stephanie Hughes breaks down the Bank of Canada\u0027s October interest rate hike. Watch here.
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