Rising mortgage rates are top of mind for many Canadians in 2018, and if you’re already in debt, increasing interest rates can be particularly worrisome.

Since July of 2017, the Bank of Canada has increased Canadian interest rates from 0.5% to 1.25%. While this is still a relatively low interest rate in historical terms, the increases in 2017 and 2018 are the first we’ve seen in more than seven years, so even small hikes are hitting Canadians hard. And experts predict that interest and mortgage rates will continue to rise in 2018.

This means you need a plan to prioritize dealing with debt before housing expenses rise further — even if you don’t own a home.

Rising mortgage rates primarily affect homeowners with variable-rate mortgages or those up for mortgage renewal on a fixed-rate. However, even if you’re renting, there could be a trickle-down effect when it comes time to discuss rent increases.

Whether you’re a homeowner or renter, if monthly payments have you living paycheque to paycheque, it’s a financially dangerous situation – especially with the potential for further increases to interest rates. You need to look at how you can reduce debt and adapt to a higher cost of living.

Debt management is often a multi-pronged approach and it’s not always one-solution-fits-all. But a good starting point is to take stock of your current situation. Ask yourself these questions:

• What is your current cost of living (i.e. how much income do you need to pay your monthly expenses)? Are you spending more than you make?
• What are your debt sources? How many of them are subject to interest rate increases or could be affected by a trickle down, as with housing rentals?
• Are there any areas in your current budget where you could cut back or save? If you’re not sure, our past blog on Creating a Personal Budget Template can be a useful resource.

If your debt is too great that no amount of budgeting will get you out, it might be time to seek professional advice. The team of Licensed Insolvency Trustees at Fuller Landau are experts at personal debt management. We can help you explore your debt options, such as budgeting, debt consolidation, or filing for Consumer Proposal or Bankruptcy, and get you back to financial health.

Don’t wait until rising mortgage rates increase further. Get a handle on your debt today by contacting Fuller Landau Debt Solutions for a free consultation.

Call (416) 927-7200 or visit www.fullerdebt.com.