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

Pregnant Cariboo firefighter tries to save own house from blaze

Julia Flinton and Anthony Sellars both worked on the 2017 wildfires

Road report for Highway 20

Fog patches and slippery sections; Drive BC

Woman killed in head-on crash near Vanderhoof

RCMP say driver crossed the centre line and hit a loaded fuel tanker truck

Mining company prospecting for gold near Bella Coola

Gold discovered in alpine areas where glaciers are receding

‘Tripod’ delays access to Unist’ot’en camp

Social media rumours of cultural significance quashed, meaning police “exclusion zones” should end.

B.C. opioid crisis to get same world-renowned treatment approach as HIV/AIDS

A program that focuses on treatment as prevention will roll out Jan. 17

Former welfare clients still owed money, B.C. Ombudsperson says

Investigation found 2,600 people docked illegally for earning income

Prince George could get province’s second BC Cannabis Store

The first brick-and-mortar government retail location opened in Kamloops on Oct. 17

B.C. chowdery caught up in ‘rat-in-soup’ scandal to close

Crab Park Chowdery will be shutting down Jan. 20

Teen vaping is an epidemic: US government

E-cigarettes are now the top high-risk substance used by teenagers, outpacing cigarettes, alcohol, marijuana

Vancouver councillors unanimously approve motion declaring climate emergency

Vancouver joins cities like Los Angeles and London

Caribou herd disappears from Kootenays after last cow relocated

One cow from the South Selkirk herd and two from the Purcells were moved this week

‘I never said there was no collusion,’ Trump lawyer says

President Donald Trump’s lawyer Rudy Giuliani says he has ‘never said there was no collusion’

Body of Canadian miner found after African kidnapping

Kirk Woodman’s body was discovered 100 kilometres from the site where he worked for Progress Mineral Mining Company in Burkina Faso

Most Read