Many Canadians can’t manage a one per cent interest rate hike
TORONTO, ON, September 13 2016 – It’s no secret, Canadians are stretched thin. Throw in a 1 per cent increase in interest rate to their mortgage or line of credit and almost a million consumers would not be able to manage their household finances according to a new study by TransUnion.
Although interest rates in Canada have remained low for many years, some Canadians may be feeling a little vulnerable if interest rates were to increase. How much would push them over the edge? Believe it or not, it will not take much. For some consumers a ¼ -point interest rate increase would be enough to push more than 700,000 Canadian households to their breaking point. If interest rates increased by ¼ per cent to 1 per cent, families with a variable mortgage or line of credit may see an increase in their monthly payments by $50 or more-and that may cause trouble.
“It is unfortunate almost a million Canadians would struggle if mortgage interest rates increased even a small amount. However now is a good opportunity for Canadians to review their budgets and make the necessary cutbacks needed to use this found money to reduce their debt,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“I know cutting back on expenses may be tough from the outset however every little bit helps. It can be a difference between managing or struggling with your debt load,” says Schwartz.
There are many ways for Canadians to increase their cash flow by cutting back on their household expenses. Consolidated Credit has prepared the following tips for consumers:
- Set realistic financial goals. Create a short term goal to save a certain amount or pay off a specific debt within a specific time period.
- Don’t take on more debt. Easier said than done however adding more debt to existing debt is a recipe for debt disaster. Resist temptation and just say no to new debt.
- Make a list of your debts and prioritize! Time to roll up the sleeves and get down and dirty with your debt management. Create a list of how much you owe; what the interest rates and charges are and make the necessary adjustments with your priorities.
- Track your expenses. Create a budget to understand where your cash is going and where it is coming from. Use a budget to cut your spending and free up some cash so that you can achieve your goals.
- Grab a life line and pull yourself to shore. Debt can be hard to manage all by yourself. When it gets too hard to control. Get help from a trusted financial advisor.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Natasha Carr, Community and Public Relations Manager, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 416-830-4720, F: 416-915-5200, E: [email protected]