Car loan and lease, personal line of credit, personal loan, student loan… The new increase in the Bank of Canada's key rate will also be felt on non-mortgage debt.
“The increase in the key rate has a direct effect on the credit margin rate and on variable credit and influences several other rates. In the last few weeks, all rates have increased,” summarizes Hendrix Vachon, senior economist at Desjardins Group.
Student and auto loans
For a loan automobile of $30,000 for example, the monthly payment increases by $40, according to Pierre Fortin, licensed insolvency trustee and president of Jean Fortin & Associates. Many people who have ordered a new car will find themselves on delivery with a higher interest rate.
For a student loan of $20,000, same deal, we go from 2.95 to 5.20% if you get the prime rate and the monthly payment increases by $21.
This may not seem like much compared to mortgage increases, but Mr. Fortin believes that it is the last straw that can break the camel's back.
“The difference is less great than for the mortgage, but we add it to everything else. More groceries, more gas, more minimum payment on the credit card, that's a lot all at once,” he explains.
The less affluent or first-time buyers who have acquired a property at a high price during the pandemic have little room for maneuver according to him.
The insolvency specialist fears the increased use of credit cards, which he believes could “become a scourge » with very easy access and interest rates that reach 20%.
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Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my email@example.com 1-800-268-7128