In the wake of the Bank of Canada raising its trend-setting interest rate by a quarter-point to 0.75 percent, the first hike in almost seven years, Scott Hannah with the Credit Counselling Society of B.C. says it won’t break the bank.
“That’s manageable for most households. It’s what happens if there are a number of these small increases in the short term.”
LISTEN: CKNW reporter Simon Little talks to Scott Hannah of the Credit Counselling Society of B.C.
Hannah says many variable rate mortgage holders could be paying about $60 more per month, but he says they’re not the only ones vulnerable to the hike.
“It’s quite common for us to be assisting consumers with anything from $25,000 to $100,000 in unsecured debt, credit cards, loans, lines of credit. And the difficulty is, you get to the point where you have difficulty being able to manage all of that debt, especially with forecasted interest rate hikes.”
Hannah says most families should be able to absorb a quarter point bump, but warns if rates were to climb a full point it could put some underwater.
He says debt holders should use the hike to reexamine their finances and test what they really can afford to pay.
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