Higher interest rates for Canadians are continuing in 2018. On January 17, 2018, the Bank of Canada (BOC) announced an interest rate increase to 1.25 per cent. The BOC interest rate affects all forms of debt, including student loans, home equity lines of credit, credit cards, and more.

The strong economy, job growth, and business investments were all cited as reasons for the January increase.

The first BOC interest rate increase came in July of 2017, taking the rate from 0.5 per cent to 0.75 per cent. The second increase happened in September of 2017, going up to 1 per cent. The January announcement is the third increase; however, more are expected to come in 2018.

“While the economic outlook is expected to warrant higher interest rates over time, some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target,” the BOC said in a press release.

The BOC isn’t the only one increasing rates. After the BOC announcement, Canada’s major lenders are raising their prime lending rates, which will affect variable-rate mortgages, home equity lines of credit, and personal loans.

The BOC acknowledged Canada’s record-high household debt, but said that it predicts consumer spending will go down with increased interest rates and new mortgage rules.

The next BOC interest rate increase is scheduled for March 7.

Does the BOC interest rate increase have you worried about your debt levels? Higher interest rates can make outstanding debt that much more difficult to pay off. But there is debt relief available.

One of the best ways to find debt relief is to work with a qualified financial professional to know your options and make the wisest choice. DebtCare has debt relief programs that can help you cope with this BOC interest rate increase and any future ones, too.

Call DebtCare today at 1 (888) 890-0888.