[Newsbot]

Title: Quebec and Ontario: The great debt convergence | Financial Post
Category: Misc CDN
Posted By: shockedcanadian
Date: 2015-12-17 06:19:52
Canadian

[shockedcanadian]

Good luck

[OnTheIce]

It won't change until Canadians change their mindset.

Consumer debt is high and we just voted in a government that promised to run deficits.

Canadians don't care about debt at home or from their government.

[Lemmy]

We've had such low interest rates for so long now that people have forgotten how to handle personal debt. Government debt, well, that's the cost of having government. There's only one solution and unfortunately, that solution votes and will never vote their own jobs away. Just ask Tim Hudak.

[BartSimpson]

Lemmy Lemmy:

We've had such low interest rates for so long now that people have forgotten how to handle personal debt. Government debt, well, that's the cost of having government. There's only one solution and unfortunately, that solution votes and will never vote their own jobs away. Just ask Tim Hudak.

Now that interest rates are starting to rise that means a lot of people holding short term debt or who foolishly have adjustable rate mortgages are going to see their interest rates rise. Watch for foreclosures and bankruptcies to start increasing again.

[andyt]

My understanding is that you all have way reduced your personal debt, learned your lesson from 2008. Probably won't be a big problem. Unlike for us, where we've been pigging out, and complaining about having to pay 10% down on mortgages >500k <1000k. "It will hurt the first time buyers trying to get in the market." If you have that little down on a larger mortgage, maybe you shouldn't be in the market.

[Lemmy]

BartSimpson BartSimpson:

Now that interest rates are starting to rise that means a lot of people holding short term debt or who foolishly have adjustable rate mortgages are going to see their interest rates rise. Watch for foreclosures and bankruptcies to start increasing again.

A raise of 0.25% is nothing and there's no reason to believe further rate increases will be coming. And people with flexible rate mortgages aren't foolish because they ALWAYS pay less interest over the long-term than those locked into a rate. There's nothing about the current economic climate that would make it foolish to be in a variable-rate mortgage right now.

[Jabberwalker]

You forgot Alberta. Can Alberta suddenly stop spending now that the money isn't pouring in, anymore? Maybe not. They will probably join the others in a year or two.
The magic ends when you can't dig money out of the ground, anymore.

[Caelon]

Lemmy Lemmy:

And people with flexible rate mortgages aren't foolish because they ALWAYS pay less interest over the long-term than those locked into a rate. There's nothing about the current economic climate that would make it foolish to be in a variable-rate mortgage right now.

Come on. You really know better. From 1970 to 1982 a variable rate mortgage was the worst thing to have as interest rate rose from about 7% to 22.75%. From 1982 to the current year variable would be the better bet, although there were bumps along the way. For the next several years the people who locked themselves into a 5 year fixed will look like geniuses. Even if interest rates only rise by 1% over the next 12 to 18 months they will still be better off. Longer term averages suggest that 5% is a more realistic figure than the current sub 3% rates.