Posthaste: Latest Bank of Canada rate hike to take toll on many people's finances
The Bank of Canada‘s latest interest rate hike — the 10th increase to its key overnight rate since 2022 — is adding even more pressure on Canadians already struggling to keep up with the cost of living.
Three-in-five (59 per cent) are expecting the rate increase to have a negative impact on their finances and one-third (34 per cent) are bracing for “significant” challenges, according to a new survey by the Angus Reid Institute, which polled 1,600 Canadian adults.
Those paying a mortgage are experiencing the direct impact of increasing interest rates, with nearly two-in-five (37 per cent) having trouble making their payments. Nine in 10 mortgage-holders (89 per cent) are anticipating the latest increase will further exacerbate this pain.
Among the half (51 per cent) who find their current mortgage payments “manageable,” a majority (60 per cent) fear the rate hike will hinder their ability to keep payments in this comfortable zone going forward.
It’s not just homeowners who are finding it difficult to keep up with their payments. An even larger number of renters (45 per cent) are struggling to pay their monthly rent, with two-thirds (63 per cent) expecting their finances to worsen from the rate increase.
Unlike homeowners, renters are faced with the indirect impact of the central bank’s policy decisions as landlords pass on their increased mortgage costs to tenants. Competition for rentals is also increased as prospective homebuyers delay purchases and wait for interest rates to settle.
As a result, enthusiasm for rate hikes is diminishing, with the percentage of Canadians who want rates to fall nearly tripling since May 2022.
But Canadians are still divided on how the Bank of Canada should proceed with interest rates for
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