Canadians Concerned About Increases to Interest Rates
Prince George, B.C.- According to a new survey by MNP, a personal insolvency practice, 45% of Canadians are concerned about the impact of rising interest rates on their financial situation.
“We’ve been living with this ‘minimum payment mentality’ for so long because of low interest rates” says Grant Bazian, President at MNP LDT “Many have taken on debt without considering the affordability if and when interest rates rise,”.
72% rate their ability to cope with a 1% interest rate increase as less than optimal. Just one in four Canadians (23%) say they could absorb an additional $130 per month in interest payments on debt.
The survey also revealed other financial concerns. 30% agreeing they’re worried that they or someone in their household could lose their job.
Though a majority of Canadians (56%) say they won’t be going on vacation this summer, the time off won’t come cheap for the 44% who will.
Canadians who plan to spend money on a summer vacation this year will, on average, spend $2,149.20, when all expenses such as travel, accommodation, meals and entertainment are factored in. Just 8% say they’ll spend less than $500 on their summer vacation (including 2% who claim they won’t spend a dime), while 10% say they will fork out $3,000 or more.
Summer holidaymakers will primarily finance their vacation with cash and savings 84%. The balance say they will finance their vacation through debt, such as borrowing, a line of credit, or a credit card.
“Summer is a lot like a holiday season; there is more spending and most people haven’t saved for it,” says Bazian. “My advice is simple: do not go into debt to pay for a vacation.”