Following the Bank of Canada (BoC)s hike to the key lending rate to 1%, Bank of Montreal, CIBC, Royal Bank of Canada, Scotiabank and TD Bank all announced the rise of prime lending rate to 3.2 % from 2.95 % an increase of 0.25 % points as the BoC. 

What does this mean? It means those who currently have a variable-rate loan or mortgage will feel the impact immediately, with more of their payments going to cover interest." Anyone who currently has a variable rate mortgage should consider if now is a good time to lock into a fixed rate mortgage  "says James Laird, co founder of Ratehub.ca in a statement. " And anyone currently shopping for a home should get a pre-approval, which guarantees today's fixed rates for 120 days." In the long run, those looking to get a fixed rate loan or mortgage will ultimately face higher interest rates at the banks.

The expectation is that the Bank of Canada will continue to increase interest rates as Canada's economy heats up, and lenders will continue to pass on the full cost of those hikes to consumers.