Clients need your help as rates rise

The Bank of Canada has raised its key interest rate target three times since last summer, resulting in the big banks raising prime lending rates. As a result—and as rates continue to rise over the coming quarters—your clients might be feeling the pinch.

Almost half (47%) of Canadians say they’re skeptical they can cover their expenses over the next year without going further into debt, finds an MNP survey. And 43% say they’re already feeling the effects of increased interest rates—an 8% increase since October.

Perhaps as a consequence of being overextended with mortgages, one in three Canadians agree interest rates could potentially push them toward bankruptcy—an increase of 5% since October.

Read: Some Canadians would struggle to pay mortgages if rates rise

More optimistically, less than 30% of Canadians say they’d be challenged to cope financially if faced with a life-changing event, such as car repairs, illness and job loss. For example, those who say they’d be challenged by car repairs (28%) represent a 5% decrease since the last quarterly survey.

The central bank’s next rate announcement and monetary policy report come on April 18.

For more poll details, see the MNP infographic.

About the poll: Between Mar. 12 and Mar. 16, Ipsos conducted the poll, which included a sample of 2,001 Canadians from Ipsos’ online panel.

Also read:

What to look for as clients renew mortgages

Scotiabank CEO downplays concerns over Canadian debt levels

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.