What’s in store for personal loan rates in 2023?
The first Bank of Canada rate announcement of the year occurred on January 25, 2023. The central bank raised its benchmark interest rate by one-quarter of a percentage point, bringing it to 4.5%. This is the eighth rate hike in less than 12 months.
The Bank of Canada now expects to pause rate hikes conditionally as it assesses the impact of its increases on the economy.
If you get a variable rate personal loan, your interest rate will go up, down or stay the same depending on what the Bank of Canada does. If your rate goes up, your monthly payment will generally stay the same, but more will go towards paying the interest vs principal. If you get a fixed rate personal loan, your interest rate will stay the same throughout the life of the loan.