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

West Kootenay highways a mess as heavy snowfall continues

‘Roads are very icy, people have to be patient and have to slow down’

Over $25,000 raised for Columbia Basin literacy

Success for 2018 Books for Kids campaign

It’s the last day to vote in B.C.’s referendum on electoral reform

Ballots must now be dropped off in person to meet the deadline of 4:30 p.m.

Grand Forks bantam team takes Nelson tournament

The team dominated the competition with some outstanding displays of skill and technique.

Donate to the Grand Forks and District Public Library

The library is undertaking significant washroom renovations.

VIDEO: Close encounter with a whale near Canada-U.S border

Ron Gillies had his camera ready when a whale appeared Dec. 7

France shooting: 2 dead, several wounded in Strasbourg

A world-famous Christmas market was put on lock down on Tuesday

Canadian warship witnesses possible violations of North Korea sanctions

Crew members on HMCS Calgary took photos and collected other information

Christine Sinclair named Canadian Women’s player of the year again

This is the 14th time Sinclair has been named player of the year

B.C. man wants trapping laws changed after dog killed

Louis Seguin’s 10-month-old Australian shepherd died in a body-gripping trap last month

Nearly 8,000 homeless in B.C., first province-wide count reveals

Twenty-four seperate counts in B.C. cities found there are thousands of homeless in all corners of province

UPDATE: B.C. judge grants $10M bail for Huawei executive wanted by U.S.

Meng Wanzhou was detained at the request of the U.S. during a layover at the Vancouver airport

Famous giant tortoise DNA may hold fountain of youth: UCBO

After Lonesome George’s death he still provides clues to longer life

Oogie Boogie, Sandy Claws and coffin sleigh part of B.C. couple’s holiday display

Chilliwack couple decorates their house for the holidays using Nightmare Before Christmas theme

Most Read