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Last month, the Bank of Canada raised its key interest rate to 5%, the highest it’s been since 2001. This matters because other banks and financial institutions base their Prime interest rate on this key interest rate. Of course, higher interest rates put more of a financial burden on people as it becomes more expensive to make mortgage payments.

So, what can you do to protect yourself from higher interest rates? We’ll explain in the section below.

Protect yourself from higher interest rates

Create a budget: Work on putting together a detailed budget to track your income and expenses. By doing this, you can identify areas you can cut back on to help with potentially higher mortgage payments down the road.

Debt repayment: If you have multiple mortgages to pay off, focus on the ones with higher interest rates first. You may even consider deferring lower-interest payments for the time being.

Make extra payments: Making extra payments towards your monthly mortgage will help you reduce the overall interest you’ll pay.

Generate additional income: There many ways to generate additional income to help with increased mortgage payments. You can explore getting a second job, starting an online business, or renting out space in your house to collect rent.