A survey showed that Canadians are growing increasingly anxious about their ability to handle higher interest rates, showing that the rising fear can lead to bankruptcy, according to BNN Bloomberg.
The survey conducted by Ipsos on behalf of MNP showed that a third of the participants said the concerns can push them to bankruptcy, marking a slight uptick since the previous survey back in June.
“It’s just common nature where people would think: ‘Interest rates are going up. I’m concerned,’ but 33 per cent seems to be a bit of a disturbing number for sure,” Bazian told BNN Bloomberg in an interview on Tuesday.
Meanwhile, 45% of the participants said they are already feeling the effects of higher interest rates.
“With little decrease in household debt and the pace of rate hikes expected to accelerate, we will likely see a more immediate and significant effect on borrowers with rate increases in the future,” Bazian said in a release.
The higher rates are expected to take place on Wednesday, with investors almost universally expecting the Bank of Canada to raise its benchmark interest rate to 1.75 per cent to 1.5 per cent. The bank has already raised the main policy rate four times since 2017 summer.
While the survey did not specifically ask respondents about housing concerns, Bazian said he believes big expenses are stressing Canadians the most
“In areas where they have high mortgages as a percentage of their income, it’s going to be a concern, as I outlined in Greater Toronto and Greater Vancouver.”
According to the survey, younger Canadians seem to be the most vulnerable with the survey showing that nearly two-thirds of millenials are worried about paying their bills.