Almost four in 10 of all British Columbians are concerned about their ability to pay off their debts if the Bank of Canada raises interest rates.
Still, the new Ipsos Reid poll found that compared to other provinces, British Columbians feel most comfortable about their debt load – even if interest rates go up.
“Many are beginning to realize they have taken on more debt than they can manage, even with low interest rates,” says Kelowna-based Darrin Surminsky, a licensed insolvency trustee at MNP Debt, which commissioned the survey.
He's concerned about the number of B.C. homeowners using their homes as ATMs, taking on more debt and reducing debt repayments.
Nearly a third of those surveyed say their borrowing capacity has grown over the past 12 months, and of those, 36 per cent are more free with their spending as a result.
“This kind of care-free attitude toward borrowing and spending is irrational. The reality is that any sort of financial hiccup – like a job loss, divorce or decrease in home prices – may make it impossible for many to meet their debt repayment obligations,” says Surminsky.
Of those surveyed, 20 per cent feel they could move toward bankruptcy if interest rates do rise.
While nearly 40 per cent of British Columbians are concerned about the rise in interest rates, that puts us at the bottom end of the scale.
More than 60 per cent of people in Atlantic Canada feel the same way, while in 59 per cent of people in Ontario and 55 per cent in Alberta say they would be more concerned with their ability to repay debts if rates do rise.