Following last week’s interest rate rise, the Financial Consumer Agency of Canada is advising households to review their budgets and debts.
The agency says that with higher rates, which could increase further in coming months, consumers should look at expenses including increased costs of loans due for review such as fixed rate mortgages.
“An increase in interest rates is a good time for Canadians to review their budgets and figure out how a rate increase could impact their finances. FCAC tools and information can help people make informed financial decisions when creating a plan to pay down debt and set savings goals,” said Jane Rooney, Financial Literacy Leader, FCAC.
Among the measures that FCAC advises are paying down larger debts and making prepayments on their mortgage or accelerating mortgage payments.
“Many Canadians have high debt and low savings,” added FCAC commissioner Lucie Tedesco.
“Even a slight increase in interest rates puts Canadians at risk of carrying debt over longer periods of time, leaving them more vulnerable to unforeseen events or unexpected expenses. We know that those who budget, make plans to pay off debt and set savings goals usually succeed."
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