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

Merry Guanas poised to be Lacombe’s first cannabis dispensary

Cannabis retail owner expects a six-month wait before industry comes to city

Lacombe hosts 6th Invasive Species Council Conference at LMC

Council looks to protect native ecological environments in Alberta

Construction along Woodland and Fairway drives

Construction in this area is planned for the week of March 25, 2019

Lacombe’s CACHS Knights girls come up just short at Provincials

Cold shooting second half prevents Lacombe girls from medal round

NDP Leader Rachel Notley stops in Red Deer on campaign trail

Notley promises hospital expansion, cath lab, pipelines and energy industry expansion

WATCH: ‘Napalm Girl’ discusses journey from hatred to forgiveness in Lacombe

Burman University’s Herr Lecture Series welcomed Kim Phuc Phan Thi to Lacombe

Women of Excellence Awards introduces ‘Women of Excellence in Construction’

Gala will take place June 19th at the Sheraton Red Deer

New Leger polls suggests federal Liberals lagging Conservatives

Overall, 31 per cent of respondents polled said they would vote for Justin Trudeau’s Liberals

Teen girl accused in plot to attack Kamloops school with weapons out on bail

Judge warned the girl she would be back in jail if she threatened to shoot anyone

Oil prices, Alberta election call cloud Stampede chuckwagon auction expectations

The top money bid last year came from Versatile Energy Services, Ltd.

Pot industry welcomes decreased edibles tax, but unhappy medical tax remains

Taxes can increase the cost of medical cannabis by as much as 25 per cent

‘It has to send a message:’ Broncos families await sentencing for truck driver

Jaskirat Singh Sidhu pleaded guilty to 29 counts of dangerous driving and apologized in court

MPs continue voting marathon as Tories protest shutdown of Wilson-Raybould motion

Multiple MPs have resigned from Trudeau’s Liberal cabinet

European, Canadian regulators to do own review of Boeing jet

Air Canada plans to remove the Boeing 737 Max from its schedule at least through July 1

Most Read