Do you fear or welcome interest rate increases?

[Admiral Beez]

Media is reporting that interest rates are going to continue their increases, causing worry to many.

https://www.cbc.ca/news/business/cbc-survey-rising-interest-rates-household-debt-mortgage-1.4864965

But I welcome a moderate rate increase. I'm 47 years old, house is paid off, student loans paid off about ten years ago, I never carry credit card debt, have a small LoC debt and our cars have locked in 0.5% loans through the dealers. You might think I'm on easy street, but now I'm saving for retirement, and interest rates as an ROI suck. As a teenager in the 1980s I had GICs paying over 15%. Today, unless you're playing the stock market, you're stuck with 2% or much less in government issued debt or savings accounts.

So, I welcome interest rate hikes, to a moderate level. What I'd really like to see is a return to the days when Canadians didn't borrow to buy everyday items, and interest rates might force us in that direction.

 

[Fresco]

Interest rates need to be periodically raised otherwise you get a runaway economy and overinflated housing market where few people can afford to buy a home (not that it isnt already like that).

So yes, I'm okay with it

 

[lenaitch]

I'm roughly in the same boat as the Admiral (but older). I remember those rates of return, but also remember mortgages in the 18% range. I had one at, if I recall, 10% and felt I was one lucky dude. Investment return rates these days barely cover cost of living increases, less so if you factor in management fees. Bank account rates are one tiny step above a sock drawer. Interests have to fluctuate in a functioning market economy and the way to do it is gradual steps like we have seen lately. It wasn't Venezuela but back during the heady early 80s it was almost heart stopping to open the paper or watch the news for the latest rates.
I do feel for those trying to put a roof over their heads in the GTA. While the rates have been low, the prices have not. I think the newer 'stress tests' that the BOC has imposed are a good idea. It might be frustrating for many but if you can't handle a multi-year contract commitment, then you shouldn't get into one. If things go south rapidly, we don't want a repeat of the US housing crisis where people were approved for mortgages that had no business getting one.

 

[SunriseChampion]

In spite of the fact that I will either default on my loans or become homeless (meaning, I'd probably default on my loans because fu*k a bank, I've already paid them back in interest and I don't think I want to be homeless) if rates go up, I don't really care if they do.

In fact, I think it'll be a healthy slap in the face to people who got mortgages on properties they had no business even looking at.
When I got myself into debt so I could finance my travels in my 20s (because waiting til I'm 50 seemed like a potential dead end seeing as you never know when you'll be dead) I knew what I was doing. Did it anyway. That's on credit card debt with 27% and 11% interest rates and not a barely-there mortgage rate. I'm not sure a lot of people who got mortgages to buy properties they had no business even looking at quite realise what they're in for. Precisely because their debt is so much cheaper.

I don't know, I'm all for rates going up mostly because I'm interested to see what it does to the housing market.

I rent and even if I defaulted on my debts I could just stay here and keep renting. Not sure what people who would have to default on their mortgages would do.

 

[TheKingEast]

Within reason.... I'm all for a moderate rise in rates.

But I'd also like to see some of the new rules Wynne brought in to be removed or relaxed. Rent control of 1..8% is downright stupid and further increases prices. Neglecting public transit is stupid and also increases housing prices. So it's not just about rates, it's a combination of many things. I also don't think that someone putting 35% down shouldn't be treated the same as someone putting down 5%. The fact that they are both treated the same is ridiculous. No point putting more than 20% down now for that reason. No incentive to do so.