RBC, TD Bank, Canadian Imperial Bank of Commerce, Bank of Montreal and Scotiabank will raise their key rates by a full percentage point to 4.70 per cent, from 3.70 per cent, effective Thursday. Prime rates are associated with many types of loans, including variable rate mortgages, home equity lines of credit and auto loans. It’s typical to see the big Canadian banks follow in the central bank’s footsteps and adjust their key rates to lock. “This means anyone with an adjustable rate mortgage or home equity line of credit (HELOC) will see their interest rate rise accordingly. This group will have to figure out what their new payment will be with this rate increase and also budget for further increases this year,” James Laird, co-CEO of Ratehub.ca, said in a statement Wednesday. “Anyone with a fixed rate mortgage is not affected until their next renewal date. If that renewal date approaches soon, they will have to start calculating their payments based on the rates available today.” Earlier Wednesday, the Bank of Canada surprised Bay Street with a full hike, raising its overnight rate to 2.50%. It is the biggest increase since 1998.
