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

RCMP looking for missing Duncan teen

Dallas Macleod, 18, was last seen on Aug. 10

‘Beauty amongst such tragedy:’ B.C. photographer captures nature’s trifecta

David Luggi’s photo from a beach in Fraser Lake shows Shovel Lake wildfire, Big Dipper and an aurora

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

Ladysmith Arts Council awarded $20K to develop public art strategy

The Arts Council of Ladysmith and District has been given $20,000 by… Continue reading

VIDEO: Fires break out in scrap piles at Harmac mill

Nanaimo firefighters got blazes under control in early morning hours Saturday

Canadians fear for relatives trapped amid flooding in Indian state of Kerala

More than 800,000people have been displaced by floods and landslides

IndyCar driver Wickens flown to hospital after scary crash

IndyCar said Wickens was awake and alert as he was taken to a hospital

Ex-BCTF president ‘undeterred’ after early release from pipeline protest jail term

Susan Lambert and Order of Canada recipient Jean Swanson released early

Fast food chains look to capitalize on vegetarian, vegan trend with new items

Seven per cent of Canadians consider themselves vegetarians and 2.3 per cent identify as vegans

B.C. swimmer halts journey across Strait of Juan de Fuca after hypothermia sets in

Victoria MS athlete Susan Simmons swam for eight-and-a-half hours in 9 C choppy waters

‘Hard on water:’ Smoke not the only long-range effect of wildfires

The project began more than 10 years ago after southern Alberta’s 2003 Lost Creek fire

B.C. VIEWS: Genuine aboriginal rights are misused and discredited

Camp Cloud one of long line of protests falsely asserting title

Most Read