Consumer credit cards are posed in North Andover, Mass. on March 5, 2012. THE CANADIAN PRES

Higher interest rates to hit younger, middle-income households

The Bank of Canada recently raised its trend-setting interest rate for the fourth time in a year

A newly released federal analysis says younger, middle-income households will feel the biggest impacts from the Bank of Canada’s gradual move towards higher interest rates.

The briefing note prepared for Finance Minister Bill Morneau examines the types of households — by income, age and region — most affected by the central bank’s rate-hiking path from extremely low levels.

RELATED: Central bank hikes rate, says tariffs already in place to have modest impact

The September 2017 document obtained by The Canadian Press under the Access to Information Act puts a particular focus on how rising rates will boost debt payments for highly indebted households, which are described as those with debt-to-income levels of at least 350 per cent.

The memo says 12 per cent of all Canadian households carry these heavy debt loads and are most likely to be middle-income earners, young to middle-aged, mortgage holders, and live in Ontario and British Columbia.

The Bank of Canada recently raised its trend-setting interest rate for the fourth time in a year to bring the benchmark to 1.5 per cent, its highest level since December 2008, but still low by historical standards.

RELATED: Household debt, housing remain key risks for financial system: Bank of Canada

The central bank raises its interest rate as a way to help keep inflation from climbing above its ideal target range of one to three per cent.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Supporters rally for Jason Kenney as UCP leader stops in Red Deer

Kenney promises equalization reform, stopping ‘Trudeau-Notley’ payroll hike, trade, economic mobility

Sylvan Lake anglers reminded to remove ice huts before spring thaw

Anglers have until March 31 to remove their structures from the surface of the ice

Protect your pets from ticks, says Sylvan Lake vet

The number of ticks in Alberta has increased, and has put people and pets in danger of Lyme disease

Check online to make sure you’re registered to vote in upcoming provincial election

Advance polls open Tuesday, April 9th to Saturday, April 13th

NDP Leader Rachel Notley stops in Red Deer on campaign trail

Notley promises hospital expansion, cath lab, pipelines and energy industry expansion

VIDEO: Restaurant robots are already in Canada

Robo Sushi in Toronto has waist-high robots that guide patrons to empty seats

Judges on Twitter? Ethical guidance for those on the bench under review

Canadian judges involvement in community life are among issues under review

1,300 cruise ship passengers rescued by helicopter amid storm off Norway’s coast

Rescue teams with helicopters and boats were sent to evacuate the cruise ship under extremely difficult circumstances

B.C. university to offer first graduate program on mindfulness in Canada

University of the Fraser Valley says the mostly-online program focuses on self-care and well being

Sentencing judge in Broncos crash calls for carnage on highways to end

Judge Inez Cardinal sentenced Jaskirat Singh Sidhu to eight years

‘Families torn apart:’ Truck driver in fatal Broncos crash gets 8-year sentence

Judge Inez Cardinal told court in Melfort, Sask., that Sidhu’s remorse and guilty plea were mitigating factors

WestJet sticking with Boeing 737 Max once planes certified to fly

WestJet had expected to add two more of the planes this year to increase its fleet to 13

Fierce house cat spotted as ‘aggressor’ in face off with coyote in B.C. backyard

North Vancouver resident Norm Lee captures orange cat versus coyote in backyard showdown

Most Read