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

Bevy of remarkable birthdays celebrated in Aldergrove

Maudie MacPherson (age 101), Vera Banner (91) and Alice Utas (95)

Pond hockey banned in public parks under updated Township bylaw

Public spaces bylaw imposes new restrictions on smoking, possession of drug paraphernalia, geocaching and more

Election 2018: Kim Richter withdraws from mayor’s race, runs for council instead

In a Facebook post, Richter announced she will seek another term on Township council

Langley trampoline gymnast off to Peru for world qualifiers

The gymnastics club is holding an open house this Saturday, Aug. 18, with free drop-in sessions.

VIDEO: Langley RCMP officer and brother lead Amazing Race Canada Heroes Edition

Courtney and Taylor Callens have become the team to beat

B.C. wildfires 2018: Hazy skies impacting crews in spotting new fires

18,000 people are on an evacuation alert, with 3,000 homes under an evacuation order

Minister optimistic after 2 days of Columbia River Treaty negotiations

Canadian and U.S. officials met in Nelson Wednesday and Thursday to discuss future of the treaty

Man dies in B.C. police cell while awaiting court hearing

An independent investigation is underway after a man died while in Penticton police custody Aug. 16

RCMP appeal for tips, dashcam footage in German tourist shooting west of Calgary

The Durango crashed into the ditch after the shooting near the Goodstoney Rodeo Centre

2 nurses attacked at B.C. psych hospital, union calls for in-unit security

PHSA says that in-unit guards would do more harm than good

Former B.C. optician won’t be jailed for sexually assaulting minor

Kenneth Pilkington sentenced to 24 months’ probation for offence three decades ago

Mt. Hicks fire 15% contained, continues to burn north of Agassiz

The fire, suspected to be caused by a vehicle with a flat tire, not threatening any structures

Police responding to ‘unfolding’ incident in Maple Ridge suburb

Helicopter, dog team, guns drawn and 16 police vehicles at Maple Ridge property

Red Cross now accepting donations for those impacted by B.C. wildfires

The Canadian Red Cross is asking for help now and in the weeks and months ahead.

Most Read