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

Revelstoke roads and weather: mix of sun and cloud

Heavy rains have destabilized the snowpack. Be careful in the backcountry

Future of heli-skiing unknown with caribou recovery plans

CMH presented to Revelstoke city council this month to outline its impact on the community

Support for Penticton shooting victim

A GoFundMe has been started for one of the four people killed April 15

Annual Nk’maplqs Challenge Cup returns easter weekend

The goal of the Vernon-based event is to revitalize the game and the tradition of an all-native hockey tournament in the Interior.

Home Hardware to give away free Reusable Shopping Bags in honour of Earth Day

“We feel we have a responsibility to keep our ecological footprint as small as possible”

B.C. RCMP receive application for Police Cat Services

RCMP announced the launch of the Police Cat Services unit as an April fools joke

Shuswap dancer stays across street from Penticton shooting day after Salmon Arm tragedy

Dancers come for festival, put in lockdown in rec centre, watch police response from Airbnb window

Kirkland Signature veggie burgers recalled due to possible metal fragments

Recalled products came in 1.7 kg packages with a best before date of Apr. 23, 2019

Chaos at the ferry terminal for people heading from Vancouver to the Island

Easter crowds create backlog at Tsawwassen ferry terminal

COLUMN: Bunnies, sexuality and the freedom to read

A book about a gay bunny has been the subject of challenges

Vernon-raised BC Was Awesome producer returns home for filming of episode

The topic of this Vernon-featured episode has not yet been revealed.

Parents of 13 who tortured children get life after hearing victims

One of their daughters fled their home and pleaded for help to a 911 operator

Most Read