The Victoria B.C. Mortgage Blog

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The Bank of Canada has raised its key interest rate as expected to 0.75 per cent — the central bank's first move upward in the cost of borrowing in seven years. 

The bank's target for the overnight rate — at which major financial institutions make one-day loans to each other — moved up by one-quarter of a percentage point from 0.50 per cent. 

The move means consumers will likely pay more for such things as variable-rate mortgages and lines of credit. 

The interest rate increase had been widely expected after senior Bank of Canada officials signalled in speeches and interviews over the past weeks that lower rates had done their job, and the Canadian economy was performing well. 

The Bank of Canada hadn't increased the overnight rate since August 2010, when it nudged it up to one per cent. After Stephen Poloz took over as governor of the bank, the rate was lowered twice in 2015 to 0.5, where it remained until Wednesday. 

Poloz and senior deputy governor Carolyn Wilkins will hold a media conference at 11:15 a.m. ET today to discuss the decision and outlook.