With the Bank of Canada’s prime interest rate jumping to 2.7 per cent from 2.45 per cent, Sherry Jenkins, a Mortgage Consultant for Axiom Mortgage Solutions in Airdrie, doesn’t think this will affect most Airdronians. 

“I don't think you're going to see a huge difference. A quarter-point is not huge. It could make a difference for people if they are carrying a lot of debt.” 

Jenkins gives an example of how the prime rate jump might affect somebody's payments: 

“If somebody has a $300,000 loan at a 1.3 percent interest rate (before the jump) a 25-year amortization would come to $1,171. After the jump, adding the quarter-point to 1.55 percent, that payment would be $1,206.” 

Jenkins does believe more changes will be coming sooner rather than later 

“I anticipate we'll see another quarter increase; I think even the next time the Bank of Canada meets, that is sort of the prediction. At one time, they were predicting six increases over two years. But I don't think we're going to see that at this point. I think that's too aggressive.” 

Jenkins says the prime rate initially dropped back at the beginning of the pandemic so people could still afford things, and now it's going back up. 

According to files from The Canadian Press, RBC and TD Bank say they are increasing their prime interest rate by 25 basis points following the Bank of Canada's rate announcement. 

The Central Bank said on Wednesday that it was increasing its key rate by a quarter of a percentage point to 0.5 per cent in a bid to help fight inflation, which is at its highest level since 1991. 

RBC and TD's increases push their prime rates to 2.70 from 2.45 per cent, effective March 3rd. 

The rise in rates will increase the cost of loans such as variable-rate mortgages that are linked to the benchmark, but won't directly affect fixed-rate mortgages. 

Other banks are expected to follow with rate increases as well. 

The Bank of Canada said it would likely need to raise rates further to reduce inflation, which hit 5.1 per cent in January.

Send your news tips, story ideas, pictures, and videos to news@discoverairdrie.com