At­lantic Cana­di­ans stressed

Many are con­cerned about in­ter­est rate hikes

The Guardian (Charlottetown) - - WEEKEND BUSINESS -

A new sur­vey re­leased this week by MNP Ltd. finds that At­lantic Cana­di­ans are con­cerned about the un­cer­tainty of a po­ten­tial hous­ing bub­ble and in­ter­est rate hikes, adding fi­nan­cial stress to house­holds al­ready car­ry­ing a record level of debt.

Half of At­lantic Cana­di­ans and 48 per cent of Cana­dian home­own­ers are con­cerned about the im­pact ris­ing in­ter­est rates will have on their fi­nances.

At the same time, 52 per cent At­lantic Cana­di­ans, are wor­ried about the po­ten­tial im­pact that a de­cline in house prices might have on home­own­ers.

“Un­em­ploy­ment in re­cent years has caused sig­nif­i­cant fi­nan­cial stress for many,” said Wal­ter MacKin­non, a li­censed in­sol­vency trustee at MNP Ltd. “As a re­sult, peo­ple have bor­rowed against their homes or used other forms of credit. What’s trou­bling is that many are un­able to af­ford this debt; they are not mak­ing reg­u­lar pay­ments against the prin­ci­pal.”

More than one in three home­own­ers in At­lantic Canada say that they will be faced with fi­nan­cial dif­fi­cul­ties if the value of their home goes down. Even if home val­ues don’t de­cline in the near fu­ture, 25 per cent of At­lantic Cana­di­ans who have a mort­gage agree that they are “in over their head” with their cur­rent mort­gage pay­ments.

When asked about their per­sonal debt sit­u­a­tion, the ma­jor­ity of At­lantic Cana­di­ans don’t feel op­ti­mistic. Seven in 10 rated their debt sit­u­a­tion as less than good, while 22 per cent rated their sit­u­a­tion as bad. On a scale of one to 10, from ter­ri­ble to ex­cel­lent, At­lantic Cana­di­ans gave them­selves an av­er­age rat­ing of 5.7, the low­est rat­ing com­pared to other provinces.

“My ad­vice is to plan ahead for the up­com­ing fi­nan­cial changes, and be­gin pay­ing down debts if you haven’t al­ready,” said MacKin­non.

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