Neil Mardian is a Senior Investment Advisor with TD Wealth (Bob Schneider/CHATNewsToday)

By Tiffany Goodwein

How the Bank of Canada interest rate hike will impact consumers

Jul 13, 2022 | 4:51 PM

MEDICINE HAT, AB — The Bank of Canada has raised its key interest rate by a full percentage, marking the highest single interest rate hike since 1998.

The Bank of Canada said the rate hike was needed in order to cool off inflation, something it says has largely been brought on by the war in Ukraine, supply chain woes and domestic pressures.

The Central Bank’s interest rate now stands at 2.5 per cent. But what does that mean for the average consumer?

Neil Mardian is a senior investment advisor at TD Wealth. He says there is good news and bad news with the Bank of Canada raising its key interest rate.

WHAT'S ON

Here is what's on this weekend in Medicine Hat and area: Dec. 13-15

21h ago

IN THE COMMUNITY

Medicine Hat's Mustard Seed adding new shelter spaces at Alberta government's request

Dec 12, 2024

HOLIDAYS

Medicine Hat Kiwanis hosting Christmas dinner, applications due Friday

Dec 12, 2024

“Obviously from a bad side of things if you have a mortgage still or debt, you obviously definitely want to be concentrating on that a lot more because those interest rates are going up considerably. However, if you are a saver, and you are a retired person these are really good news situations right now because guaranteed investments and bond investments in a portfolio are, the yields have never been higher now and, you are getting into that well above four percent range. So for a saver, this is great news,” he said.

Mardian said now is a great time to be putting money in a tax-free savings account. If you have debt, he recommends striking a good balance between paying it off and putting money in savings every month

He also said consumers may want to be cautious when it comes to purchasing big-ticket items such as vehicles, which have been hit hard by inflationary costs.

Finally, Mardian adds, Hatters should speak to a certified financial planner if they are unsure about what to do with their finances, now that the interest rate has gone up.