Trouble is looming for indebted Canadians with a growing concern over rising interest rates. And Albertans are particularly feeling the pinch, according to the latest MNP Consumer Debt Index report released on Monday.
The report indicates that 43 per cent of Canadians say they’re already feeling the effects of higher interest rates (up five points from 38 per cent three months ago and up eight points from 35 per cent six months ago) and 51 per cent fear that rising interest rates could impact their ability to repay their debts, up five points in six months. Also, 33 per cent agree that rising interest rates could push them towards bankruptcy, also up five points in six months.
Grant Bazian, president at MNP LTD, the country’s largest personal insolvency practice, said that the results show how perilously close many Canadians are to serious financial trouble.
“Nearly half of outstanding mortgages have interest rate renewals within a year so monthly mortgage payments are set to rise for a huge proportion of people. But a staggering percentage of Canadians say they already don’t have any wiggle room at all,” he said in a statement.
“The most alarming thing about the results is just how vulnerable Canadians know they are yet they still plan to amass more debt to cover basic living expenses. Households currently showing signs of financial difficulty and living on credit are about to fall into a debt trap if interest rates continue to rise or if they face an unexpected expense,” he said.
The survey also found:
- Albertans (55 per cent) are more likely to say they’re already beginning to feel the effects of interest rate increases;
- Albertans (52 per cent) are more likely to be in financial trouble if interest rates go up much more;
- Albertans (43 per cent) are more likely to be concerned that rising interest rates could move them towards bankruptcy;
- Albertans (20 per cent) are the most likely to rate their personal debt situation as terrible.
Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
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