Millennials Could Be Hit Hardest by the Bank of Canada’s Interest Rate Hike + MORE Jun 5th

When Courtney Croucher, 23, first stumbled upon “FinTok,” i.e. financial TikTok, she owed $40,000 in student loans and had no idea what her future held. It was May 2020 and she was living at her parents’ house in Cambridge, Ont., after graduating from media studies at Western University earlier that spring. Croucher watched all of her potential employment opportunities in her field dry up thanks to the pandemic.

Late at night, Croucher was scrolling through her TikTok feed when she landed on a video from @nobudgetbabe, an account with more than a million followers run by money coach Nicole Victoria. In the video, Victoria—who says she achieved millionaire status by age 30—described how people who have debt often spend money impulsively instead of successfully managing their finances. Becoming debt-free feels impossible to them, so saving seems futile. “I felt a little called out,” Croucher says. 

At the time, Croucher was wasting money on impulse buys, like clothing she’d only wear once…

Canadians, get ready to pay more to borrow money: The Bank of Canada, or BoC, announced a 0.50 per cent interest rate hike today to tame inflation, bringing its key interest rate up to 1.5 per cent, and signalled more hikes will come.

After slashing its key interest rate to 0.25 per cent at the onset of the pandemic to encourage consumers to spend, Canada’s central bank is moving full-speed ahead to rein in the same rock-bottom borrowing costs that are now contributing to high inflation. 

While the BoC’s move to bump up interest rates won’t have an impact on how much you pay at the grocery store, it could cool down housing demand and make it more difficult for people to break into the real estate market. Canadians will now pay more for fixed-rate mortgages, variable-rate mortgages and other lines of credit, such as a home equity line of credit, or HELOC. 

“People who’ve bought houses over the last two or three years at incredibly low interest rates have now got a one-and-a-half percent bump in the interest rate that they’re paying,” says Laurence Booth, a professor of finance at the University of Toronto’s Rotman School of Management…