What Investors Need to Know About Borrowing Amid Rising Interest Rates  

The past year has been punctuated with announcements of rising interest rates, as the Bank of Canada (BOC) redoubled their efforts to combat inflation with successive rate hikes. The latest, in June, brought the overnight rate up by 25 basis points to 4.75%, its highest since May 2001. Changes in interest-rate policy can have wide-ranging effects throughout the economy, and for real estate investors, it’s vital to interpret the different outcomes between long-term and short-term rates. Understanding the inversion of the yield curve — where long-term interest rates are lower than short-term rates — can help well-prepared property owners mitigate risk.