How the Recent Bank of Canada Interest Rate Increase Impacts Prime and Rate Renewals: Save Money by Shopping Around and Avoid Falling for Bank Promises
Recently, the Bank of Canada has taken significant steps to address economic change, inflation and maintain financial stability. How? A prime interest rate increase, which can have significant implications on a number of financial aspects, including rate renewals. As a consumer, understanding these changes and taking proactive measures can help you save money and avoid falling for enticing (and potentially misleading) promises from certain financial institutions. Let’s explore the impact of the Bank of Canada interest rate increase rate renewals where I’ll provide actionable tips on how you can save money by shopping around. The Bank of Canada Interest Rate Increase The Bank of Canada periodically adjusts its benchmark interest rate in response to economic conditions. An increase in the interest rate can have a domino effect on borrowing costs, impacting various financial products offered by banks. Two key areas that often feel the impact of interest rate changes are prime rates and mortgage rate renewals. Understanding Prime Rates and the Impact Prime rate serves as the foundation for many lending products, including variable-rate mortgages, lines of credit and personal loans. When the Bank of Canada raises its interest rate, banks may follow suit and increase their prime rates accordingly.