A new poll suggests Manitobans are the least worried about rising interest rates in the country, despite experts forecasting future financial hardship.
Since March, the Bank of Canada has raised its key interest rate from 0.25 to 3.25 per cent, leaving Canadians and businesses with higher borrowing costs.
“It is definitely having an effect because everything is getting expensive for me, so sometimes it becomes difficult to manage my expenses,” said one Winnipegger when asked by CTV News about how interest rates are affecting them.
“I was planning on buying a house, and now I am cancelling my plans because I cannot afford it,” said another person.
According to a new poll done by Ipsos for MNP LTD, 53 per cent of people from Saskatchewan and Manitoba are concerned about the impact of rising interest rates and its impact on their financial situation – a 10 per cent drop from last quarter.
Eighty per cent of people from the two middle provinces also agree rising interest rates will mean they will be more careful with spending, a statistic down nine points from last quarter.
The survey of 2,000 Canadians was compiled between Sept. 6 and 13 and is accurate to within 2.5 per cent 19 times out of 20.
Pamela Meger, a licensed insolvency trustee with MNP LTD, said while it’s great to see people have a positive outlook on their finances, it’s far too early to stop pinching pennies.
“The part that kind of makes me a little bit concerned as a trustee is that it’s not quite over yet, so don’t let off the gas,” said Meger. “Don’t stop doing all those good things. Really make sure you’re still staying focused.”
Despite interest rates already taking a big jump this year, many major banks like RBC are forecasting another hike to happen on Wednesday.
“I think some of those long-term effects of even the past like interest hikes haven’t really taken its full effect yet, so you know, people renewing their mortgages, they’re really going to notice a difference,” said Meger.
Peter Paley, a Winnipeg-based mortgage broker at Dominion Lending Centres and Mainstreet Mortgages, said people in a variable-rate mortgage are going to feel the impact the most.
“And those people probably started off with a really great interest rate around 1.3, 1.4 and now and now you’re going to be over 5 per cent, so it’s going to be maybe a little painful for those people,” said Paley
Paley noted the vast majority of his clients, about nine in ten, are in a fixed mortgage, but they’ll still be on the hook for an increase when or if they choose to renew.
He suggests locking in a mortgage rate as soon as possible to avoid further interest rate increases.
Both Paley and Meger agree the hikes aren’t a reason to panic, but it is a good time to check your budget and look at how you can save.
“Take out your budget and see what works best for your family,” said Paley.
“What are my debts that are going to have the biggest impact, understanding when my mortgage is going to renew? What’s the rate going to renew at and maybe start looking to adjust for that budget change because it could change $200-$300 overnight with your new mortgage,” said Meger.
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