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Bank of Canada Interest Rate Staying at 1.75% for May 2019

Bank of Canada Interest Rate Staying at 1.75% for May 2019

The Bank of Canada interest rate is staying the same for another month.

On May 29, 2019, the Bank of Canada (BOC) announced that it is keeping the Canadian interest rate at 1.75% — the same amount it has been since October of 2018.

Although rates did not increase, the BOC was optimistic in its statement that the Canadian economy is picking back up.

In particular, the BOC indicated that:

  • Job growth is strong;
  • Business weakness could be rebounding;
  • The Canadian housing market may be stabilizing;
  • And consumer spending is picking up.

This all contributed to the 1.75% hold.

So, what does this mean for finances and debt levels? There are two main factors to take away from this.

1. Don’t spend more than you can afford.

Although consumer spending picking up is good for the economy, it may not be good for your bank account. It all depends on your personal finances and circumstances.

BNN Bloomberg recently reported that consumer insolvencies — bankruptcies and consumer proposals — in Canada have climbed to the highest they’ve been in eight years: http://www.bnnbloomberg.ca/consumer-insolvencies-in-canada-climb-to-highest-in-8-years-1.1257929

“The Office of the Superintendent of Bankruptcies reported consumer insolvencies rose 5.7 per cent to 11,963 in March, compared with 11,315 in the same month a year earlier. It was the highest volume of filings in any month since March 2011,” BNN Bloomberg reported.

Even with the BOC interest rate staying on hold, it’s still important to budget, track expenses, and think carefully about where your money is going. If you do take out new credit now, make sure that it is thought through and you have a plan to pay it back.

2. There may be more increases on the way, so plan in advance now.

While the May 2019 BOC interest rate stayed the same, if the economy is picking back up, rates may start to rise again.

This means that now is the perfect time to consider what another interest rate increase could mean for your circumstances. You might look at:

  • Refinancing to a fixed-rate mortgage.
  • Taking out a secured personal loan to deal with outstanding debt at a lower interest rate (again, only if you have a plan to pay it back).
  • Starting to rebuild your credit rating now so you can access better interest rates in the future.
  • Creating a cushion in your budget for extra interest payments. By planning ahead, you can start saving money now.

The next BOC interest rate announcement is scheduled for July 10, 2019.

Prudent Financial offers personal loans, car loans, and home loans to people with bankruptcies, proposals, and bad credit histories across Toronto and the GTA. We can help you plan for BOC interest rate changes and more.

Contact us today for a free consultation. Call 1-888-852-7647 or visit www.prudentfinancial.net.

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