Financial Focus: Canadian Mortgage Interest Rates Have Nowhere to Go But Up
A few weeks ago, we came across a CBC News article which discussed a recent TransUnion survey, and the results of that survey were quite startling. We’ve spoken before about low interest rates and the fact that many Canadians have taken advantage, but it is clear that those low interest rates have nowhere to go but up. What are the potential impacts of a rate hike? The CBC article enlightened us.
According to the article, “Almost a million Canadians wouldn’t be able to handle even a one percentage point increase in the interest rate they pay on their debts.” Even more alarming is the fact that over 700,000 of those individuals wouldn’t be able to meet their monthly financial obligations if the interest rate went up by as little as 0.25 percentage points. That’s a staggering number.
While the TransUnion study does show “an overall healthy situation for Canadian borrowers, where the vast majority are staying on top of their debts and could withstand modest increases in the rates they pay on them,” if you believe yourself to be in the minority, this may be cause for more than a little concern.
Are you financially prepared if a mortgage interest rate increase is announced in the near future? Could you continue to comfortably pay all of your bills, on time, even if one of those (probably the largest one) went up?
If not, you may want to start thinking about how you can work on getting to a place where you could. Perhaps it would be prudent to use some of your home equity to consolidate debt while rates are at all-time lows and get some of those bills off the table.
Want to discuss your options? DebtCare can help. Call us today: 1-888-890-0888.