• With the Bank of Canada recently signalling that interest rates may rise sooner than many were anticipating, the question becomes how well-prepared Canadians are for higher rates?

• Over the medium-term, interest rates will likely rise at least 2 percentage points and there is no doubt that a significant minority of Canadian households will be at-risk when this occurs.

• There have been some preliminary signs that Canadians have begun to hunker down and/or protect themselves from interest rate increases. Household consumer credit growth has slowed to a substantial degree.

• Interest rates are set to rise at a gradual pace and the ability of consumers to fix into low interest rates now imply that the impact of higher rates may be felt over a number of years.

• These developments give credence to our expectation that the imbalances in the housing market and in the household debt-to-income ratio will unwind over time rather than in a precipitous fashion. At the same time, however, medium-term prospects for consumer spending remain limited.

If you have any questions as to what this means to your current mortgage plan, we are always here to help you with unbiased advice.

Contact Cory Kline at 705-794-1283 or cory@ndlc.ca

Mortgage Advisor at Neighbourhood Dominion Lending Centres