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

Police investigating after 14-year-old boy pepper sprayed at Surrey mall

Surrey RCMP say two males fled the scene before officers arrived on scene at Guildford Town Centre

Former Surrey mayor Bill Vogel dead at age 87

Vogel was Surrey’s 31st mayor, in the big chair from 1978 to 1980, and was alderman from 1973 to 1977

Woman and dogs fall through ice along Surrey’s Serpentine River

While things seem to have turned out OK this time, woman’s husband urges others to stay off thin ice

Province selects three bidding teams for Pattullo Bridge replacement

SNC-Lavalin, the company involved in allegations with Prime Minister’s Office, is among potential contractors

UPDATE: Surrey RCMP believe Cloverdale pellet gun incidents are ‘linked’

The incidents both happened in February just blocks apart

Fashion Fridays: Up your beauty game

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

St. Paul’s Hospital replacement slated to open in Vancouver in 2026

Announced many times, but this time there’s money, Adrian Dix says

Fourteen ‘dream’ homes ordered evacuated as sinkholes open in Sechelt

Sinkholes throughout the subdivision have prompted the District of Sechelt to issue evacuation orders

Third measles case in Vancouver prompts letter to parents

Measles is highly contagious and spreads easily through the air

Abbotsford’s Matsqui prison beefing up security against contraband

Correctional service says officials found a number of unauthorized items during ‘exceptional search’

January home sales were weakest since 2015, average national price falls: CREA

CREA says the national average price for all types of residential properties sold in January was $455,000

B.C. man known as ‘Papa Jimmy’ dies making daily trek to his wife

Maple Ridge 85-year-old made visits to New West for 12 years

Wilson-Raybould’s cabinet move due to departure from team: Trudeau

Jody Wilson-Raybould suddenly quit the cabinet this week, but Trudeau isn’t saying

VIDEO: Canada Winter Games athletes arrive in Red Deer from B.C. and beyond

Up to 3,600 athletes, managers and coaches will arrive throughout the day Thursday and Friday

Most Read