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Email this12:11 pm
December 17, 2016
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From the National Post -
Toronto and Vancouver most 'vulnerable' to interest rate hikes as personal debt soars, CMHC warns
For every dollar of disposable income, Vancouver residents owe $2.42; in Toronto, it's $2.08
[...]
“While households may be able to service their debt during periods of low interest rates, some may face challenges when rates rise,” it said in the report. “Highly indebted households have usually few debt consolidation options to respond to increasing debt service costs.”
The report noted that higher interest rates means that households could see an increase in the amount required for debt repayment, which could exceed their original budgets.
“The increased debt payment burden may come at the cost of reduced consumption, decreased savings or opting to make lower repayments on the principal,” it warned. “Some households might even default on their loans if their incomes are not sufficient to cover higher expenses and credit charges.”
CMHC says this could lead to a ripple effect if households begin defaulting on their loans, and banks begin scaling back on the loans they give out.
2:18 pm
November 8, 2018
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I live in GTA. Call me heartless, but I feel no sympathy for households that can't plan for very modest interest rates increase.
I paid my 25 yr. mortgage in 10 years, rates were then 7%-8%. That rate actually was quite good incentive to repay mortgage faster.
I see a lot of such articles lately and can't figure what is the objective of that campaign? To influence BOC? Hopefully, not.
3:32 pm
October 29, 2017
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This just reinforces what I said about the reflation choices made by government and the BOC. Interest rates never should have gone below the 2.0% mark of the overnight rate. Apparently many Canadians can't be trusted to manage their own money flow and they need to be restricted. We are only back up to 1.75% and a whole swath of Canadians are worried about meeting their debt payments on time and possibly defaulting.
3:41 pm
October 29, 2017
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This report was before interest rates went up..
3:49 pm
October 29, 2017
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3:58 pm
October 29, 2017
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Holiday debt bliss..
4:14 pm
December 2, 2018
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Alexandre said
I live in GTA. Call me heartless, but I feel no sympathy for households that can't plan for very modest interest rates increase.I paid my 25 yr. mortgage in 10 years, rates were then 7%-8%. That rate actually was quite good incentive to repay mortgage faster.
I see a lot of such articles lately and can't figure what is the objective of that campaign? To influence BOC? Hopefully, not.
Hey Hey....me too!!! In Vancouver, close to me, 2.42 is owed for every $1 earned. So look at all those $75,000 pick up trucks that wifey drives the kids to school in and never will have a payload on it!!! And how many families have a $240 home phone, TV and internet bill, a $300 family cell phone plan and a $600 a month gasoline bill? And how many get sucked in when they take their vehicle in for service and when they hang around the sales floor they get into some story about a new better vehicle and will give better mileage and you can keep the same payment with your trade in....but for a 7 year finance plan. How many get tricked in to buy a vehicle for 0% financing? But the salesman was a really nice guy! Did you know you are charged more and pay the interest in advance in the purchase price? And viola 0%!! So most of the folks my age are debt free so likely the folks that use credit as a payment til eternity plan...they must be in debt for $4 for every $1 earned. Credit is totally misused in Canada and there are lots of companies manipulating plans to entice the weak!!! It is like helplessly treading in water...what a horrible way to live and to be taken advantage of.
Hope that wasn’t too harsh!
Big out of hand spenders or not......make sure your company pension, if you have one, is bullet proof and/or insured in the event of insolvency. If not start saving.
It is a worth while effort to turn on ALERTS on your Credit Cards and Bank/Credit Union Accounts.
4:24 pm
October 29, 2017
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Mmmm.. 52% of Canadians worried about debt in October. I cringe at the thought of what that percentage will be after Christmas.
https://mnpdebt.ca/en/blog/fear-of-rate-hikes-continues-to-intensify-among-canadians
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