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Many concerned about making mortgage payments if interest rates rise: poll

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VANCOUVER (NEWS1130) – Nearly half of those with a mortgage have doubts about their ability to make their payments if interest rates go up, according to a new poll, and one insolvency trustee says it may be time to tighten your purse strings rather than continuing to take on more debt.

There’s a connection here with our mad real estate situation, in the view of Lana Gilbertson with MNP Debt.

As the value of people’s homes rise, she says many are spending and borrowing more than they normally would, banking on their property continuing to see the gains we’ve seen in recent years.

“British Columbians are living paycheque to paycheque, so if interest rates rise, we’re going to see an increased difficulty making payments on mortgages and other bills,” says Gilbertson.

Forty-seven percent of those who participated in this Ipsos poll say they have concerns about handling their mortgage payments if interest rates rise.

“We’re seeing that British Columbians are more comfortable taking on debt for whatever reason,” says Gilbertson. “It may or may not be due to interest rates, but certainly there is a growing comfort with taking on consumer debt.”

Gilbertson says there a few changes you can make to put yourself in a better position.

“Take a really close look at cash flow,” says Gilbertson. “In particular, expenses. Eating out, alcohol consumption and entertainment, for people who smoke, that’s a big one. But also food and household spending in general. These are areas where consumers can make big impacts.”

Gilbertson also warns against making minimum payments on credit card or other debt.

She says another important strategy is to set aside an emergency fund, ideally six months worth of wages.