The Bank of Canada is scheduled to make an interest rate announcement Wednesday that's widely expected to push its key policy rate up to 4.5 per cent - the highest it's been since 2007.
Economists are predicting the central bank, which has made a rapid succession of large hikes since it began raising from near-zero in March, is nearing an end to the increases.
Knowing how much it costs to lend money, or to deposit it with the central bank, helps set the interest rates charged on things like loans and mortgages. It has eased since then, reaching 6.8 per cent in November and 6.3 per cent in December. And shoppers have seen even higher price increases for common expenses like groceries. Grocery prices have been rising at the fastest pace in decades and were 11 per cent higher in December than they were a year ago.
When Canadians buy homes there are two kinds of mortgages they can select - fixed rate or variable. Fixed-rate mortgages allow borrowers to lock in the interest rate they will pay for a set amount of time, while variable-rate mortgages can fluctuate. The same mortgage at 5.7 per cent will see monthly mortgage payments increase to about $3,805, a $89 jump per month, she added.
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