The Bank of Canada increased its key interest rate by one percentage point Wednesday in the largest hike the country has seen in 24 years.
The move indicates the central bank will take a more aggressive approach to tackling inflation, which sits at a 39-year high of 7.7 per cent and has made groceries, vacations and other purchases more pricey.
The hike to 2.5 per cent will also impact mortgages, loans and spending habits.
Commercial banks and other financial institutions usually raise or lower their mortgage rates in tandem with the Bank of Canada’s interest rate hikes.
The rate hike means consumers should expect most variable rates to hit a range between 3.35 and four per cent, said mortgage agent Sung Lee, in a Ratesdotca release.
Leah Zlatkin, a licensed mortgage broker with Lowestrates.ca, said in a release that every $100,000 someone holds in a variable rate…