Another interest rate hike from the Bank of Canada means some Canadians could be spending a lot more on their mortgage and debt, but a University of Guelph finance researcher believes the rate hikes will end soon. 

Dr. Nikola Gradojevic is a professor in the Gordon S. Lang School of Business and Economics within the Department of Economics and Finance. His research interests include empirical asset pricing, high-frequency and international finance, risk management, machine learning and cryptocurrencies.   

Gradojevic says small businesses and average Canadians carrying heavy debt are going to feel the latest interest rate hike the most. That includes those with credit card debt, personal lines of credit and variable-rate mortgages. 

“Their interest payments, which are calculated as a percentage of the loan’s principal, will increase with the interest rate hike,” he told MoneyWise in an article that appeared in the Financial Post. 

Gradojevic says consumers can speak to their lenders about refinancing any variable-rate debt. They can also shop around among banks and credit unions and invest any savings they might have into a higher interest savings account or a term deposit. 

The good news, Gradojevic says, is that interest rate hikes are likely to end soon. 

“The Bank of Canada might continue hiking rates into October and perhaps until December, but I do not anticipate any major hikes in 2023,” he said.  

The bad news, though, is that Canada faces an increased chance of entering recession in 2023. 
“The adjustment of supply and demand for commodities, like oil and natural gas, may take up to a year or even more due to the existing uncertainties coming from the Ukraine crisis and the pandemic,” he said. 

“However, we have seen some encouraging positive signs with oil, wheat and steel prices on a declining trend lately.” 

Gradojevic is available for interviews. 


Dr. Nikola Gradojevic