While there had been talk of the Bank of Canada (BoC) implementing yet another hike to its key interest rate, the President and CEO for Access Credit Union says it was uncertain whether the Bank would make the move as inflation continues to drop. The BoC put that speculation to rest earlier this week when it raised its key interest rate by a quarter of a point to 5%.
"The Bank seems to want to take a more conservative approach and, I think they believed by putting it up a couple of times over the last few months, that's going to make sure that they can drive inflation down further," noted Davey, who said the tactic is working. "I think the high for inflation last year was eight or nine per cent, and the latest had inflation at three per cent."
While the approach appears to be effective, that doesn't mean there haven't been some growing pains for the public who are going through this transition to rates that haven't been seen in nearly 20 years. Davey said the last two jumps by the BoC has created much uncertainty among many folks who hold variable rate loans and mortgages, and they are taking a harder look at their finances and paying a bit more attention to what all of these changes mean.
"Even though the Bank has said this is likely it, you're never sure," added Davey.
He says it's a very individualistic situation.
"People have to look at their lifestyle, they have to look at what their comfortable with. Some people want certainty, some people want to make sure that they're always going to get the best rate and are willing to gamble a bit."
His advice - to speak with the people you're used to dealing with and determine the best road forward for yourself.
According to Davey, the BoC's latest move will add about $15 or $16 to the monthly payment on a $100,000 variable rate loan or mortgage. Of course, he added, if you have a $100,000 mortgage on a two-year amortization, it might not make that much of a difference because you're paying it off quickly.
Meantime, Davey noted, Access is following the BoC's move and has bumped up its prime lending rate. As for fixed rates, he says they are still looking at the bond market to see how they will change.
https://news.google.com/rss/articles/CBMiZmh0dHBzOi8vd3d3LnBlbWJpbmF2YWxsZXlvbmxpbmUuY29tL2FydGljbGVzL2FjY2Vzcy1idW1wcy1wcmltZS1sZW5kaW5nLXJhdGUtYWZ0ZXItYmFuay1vZi1jYW5hZGEtaGlrZdIBAA?oc=5
2023-07-14 10:03:36Z
2218658698
Tidak ada komentar:
Posting Komentar