Interest Rate Hikes Have Lowered Disposable Income by 3%, Bank of Canada Says

Interest Rate Hikes Have Lowered Disposable Income by 3%, Bank of Canada Says
A home for sale in Vancouver in 2016. THE CANADIAN PRESS/Jonathan Hayward
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Interest rate hikes have reduced mortgage holders’ average disposable income by about three percent as of 2024, a number that is expected to reach nearly five percent by 2027, according to a recent Bank of Canada report.

“Impacts of Interest Rate Hikes on the Consumption of Households With Mortgages“ notes that as rates go up, the amount of money that Canadians can spend on non-housing items goes down.