Rising Bank of Canada interest rates force difficult mortgage payments on Saskatchewan homes
Global News
The central bank raised its policy rate to 4.5 per cent on Jan. 25, 2023, an increase of 25 basis points and the highest the Bank of Canada’s key rate has been since 2007.
The Bank of Canada has once again raised its key interest rate for Canadians.
The central bank raised its policy rate to 4.5 per cent in its first decision of 2023, an increase of 25 basis points. This is the highest the Bank of Canada’s key rate has been since 2007.
However, some Saskatchewan researchers don’t believe the increase will have a large effect on the economy.
“I don’t expect it to have a huge impact on Saskatchewan’s economy,” said Jason Childs, an associate professor of economics at the University of Regina. “We’re still going to be driven largely by commodities, and services are going to still play a big role. I don’t see that quarter-point change really making or breaking either of those industries.”
One area it will affect is housing.
“It will continue to slow down housing and soften the demand for housing,” Childs said. “So if you have a house for sale, you’re probably not going to get as much for it as you would have two years ago.”
Perhaps where it will be felt most is with variable-rate mortgages.
“This quarter point today is going to mean about another $60 a month on a typical $250,000 mortgage,” Childs said. “But if you’re getting hit with that three per cent change all at once, that’s going to be a lot bigger. That’s going to be several hundred dollars a month more coming out of your pocket.”