The bank’s next rate decision is set for Wednesday. Many economists — including— are expecting policymakers will not be satisfied with a single hike in June and will bring the policy rate up to 5.0 per cent as core inflation remains sticky and the economy shows signs of resilience.
“For most people who own a home today, they’ve never experienced this interest rate environment,” Ahmed-Haq said.The higher interest rates go, the more Canadians are paying to service household debt. Ahmed-Haq said Canadians might feel like they’re forced to take on additional debt just to make payments on their existing loans, but this can start a “vicious cycle” that only sees debt obligations grow.If consumers are forced into this position, she recommends only ever taking on a loan at a lower interest rate than the debt you’re paying off — consolidating high-interest debt like credit cards into a loan with a lower monthly payment to help keep the loans manageable.