Sask. residents report fear of rising interest rates as more hikes expected

Four in 10 said if the central bank continues to raise rates, which it is widely anticipated to do, it could lead them to financial trouble.

The survey was conducted between Sept. 10 and Sept. 17 using a sample of 2,003 Canadians.

Janaye Chubb, a financial planner with Hein Financial Group in North Battleford, said many of her clients are becoming more cautious when it comes to taking on larger debt loads, be it for their home or business.

She said many are raising red flags with their revolving debt projects, such as a vehicle or consumer loan, and their lines of credit, especially if they are tied to variable interest rates, more so than mortgages. However, she said if someone’s mortgage is coming up for renewal in the near future, it is a conversation they will need to have and they should expect to pay a little bit more.

“But in the next couple of years, those families are going to be more concerned about the revolving credit because that is an immediate change,” she said.

Chubb said it is “scary” to see statistics showing that one in three Canadians are worried rising rates are pushing them toward bankruptcy.

“I would be devastated to hear that for even one of my clients but it is a reality that many families are facing,” she said.

She was unsure what if any positives will come out of future rate increases, especially for the Battlefords. She pointed to a soft housing market and said while plenty of great expansion has occurred downtown and in community promotion, “a lot of those effects and changes take time to be realized.”

“It is something in the next little while that could still find some people in tricky situations,” she added.

Her advice is simple: “Have the conversation and talk to the experts.”

“There are different ways we can position lending products to make sure everything is working properly for you,” she said. “It is out of our control but we have to plan for it and understand how interest rates were so low, but it is the reality they will come back up.”

Licensed Insolvency Trustee with MNP Pamela Meger echoed many of these comments and said it is important for people to buckle down and look at their budgets. She said many who come to her are overwhelmed with what the rate increases could mean for their debt load and are “sort of floundering trying to figure out what to do next.”

She believed the growing concern over individual financial situations are due to a mixture of living beyond one’s means and the comfortability that came with borrowing at such a low interest rate. She said the increase in the cost of living is playing a part and taking a toll on those with fixed incomes, such as seniors.

“I see a lot more pensioners than I used to before,” she said.

“Now that we had a bump [in interest rates] people are actually seeing what that means and now the fear is setting in and people are paying a bit more attention to their budgets.”

The survey found 86 per cent of Saskatchewan and Manitoba residents will be more careful with how they spend their money due to the rising rates. That is up 10 points since June, the highest increase compared to other provinces.

tyler.marr@jpbg.ca

On Twitter: @JournoMarr

by Tyler Marr

Sask. residents report fear of rising interest rates as more hikes expected

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