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.
This means those with variable mortgages will be affected and anyone whose mortgage rate is up for renewal will likely have “sticker shock,” said Laurie Campbell, director of client financial wellness at advisement firm Bromwich + Smith.
“It’s going to…