What will be the impact on your portfolio of the increase in interest rates decreed by the Bank of Canada this week? The misfortune of some is the happiness of others. While some will have to reduce their expenses, or even move, others will see their interest income increase. Here are your comments.
Posted at 3:00 p.m.
The worst is the young families who have just arrived on the market and who have been badly advised to buy a house at a price sometimes 30% higher than the posted price.
Marc Ladurantaye, Val-d’Or
Live beyond its means
I bought a house in 1998 and paid 6.5% fixed for my mortgage and when I renewed it I got 4.1%. I paid off my house quickly deciding to put all my savings on my mortgage, being aware of the effect of compound interest. However, I have seen many households re-borrowing large sums, so that today the mortgage has exceeded the original price of the house. Even with the current policy rate, mortgage rates are still very low. What worries me is that all my money saved is no longer worth much because of inflation and I believe that the Bank of Canada should have reacted earlier. Many people live beyond their financial means. This overheating of consumption does nothing to reduce greenhouse gases.
Carole Vary
Modified plans
On the eve of retirement and still with a mortgage to take on, we changed our plans: no travel, no new electric car, and now we go through the flyers for the grocery store. In short, we want to reduce our spending, hoping that many will follow suit and help reduce demand and therefore inflation.
Marie-Claire Fortin, Montreal
At the hooks of our banking institutions
On the one hand, the government is giving us retirees a 10% increase in our old age pension, and on the other, the Bank of Canada is taking it away from us. We wanted to live in our house, now we’ll have to think about it. Selling and renting a 4 and a half at $1,500 a month? We are at the hook of our banking institutions. At 80, let’s hope that our health will allow us to support this inflation.
Bob Picher
Good news !
For me, the increase in the key rate is good news! My husband and I have investments, which will raise interest rates. We have no debt, because buying without having the money is not in our principles. My husband is a supervisor in a furniture factory and I am a housewife. We have a house. We live well, but no extravagant expenses!
Johanne Bernard, Saint-Hyacinthe
Awarded for ‘saving for old age’
I am a 70 year old retiree with no debt. For me the increase of 100 points is an excellent thing, the guaranteed investment certificates (GICs) that I own and whose returns help me to cover part of the rise in inflation will probably bring in a little more than crumbs, as has been the case in recent years. I will then finally be rewarded for having “saved for my old age”.
Pierre Daigneault
Prices not yet high enough
At the risk of shocking a little… If we apply a “price breaking point” logic, and we see the frenzy of purchases made by consumers, I believe that the prices are not yet high enough. Wanting to have it all, and immediately, prices adjust according to demand. If I was still in business, I would raise my prices to breaking point…and be unhappy with every sale thinking my price wasn’t high enough! Think about it when deciding on a purchase, because as a wise man once said, “Do you really need it?” »
Daniel Corbeil
Let the rate rise to the sky
If it can make us aware of our overconsumption, it will be good. Otherwise, if the rate goes up to the sky, it may make some people think.
Stephane Brosseau, Longueuil
“Walmart’olics”
It was time, that’s all. When I bought my house in 1981, the mortgage rate was over 6% and in subsequent years the mortgage rate reached 23%, so when people complain that it’s close to 5%, I can only to think that we should have thought twice before going into debt and consuming like “Walmart’olics”.
Louis Dumont
The fruit of a lifetime of work that loses its value
We go to the ATM to withdraw $200. Every day, the $200 is amputated. Well, we think we’ll withdraw another $200 later in the week…. Maybe $300, because with inflation it goes down faster…light stress. But when you look at your investment portfolio, the fruit of a lifetime of work, losing value, “big time” from week to week, there the stress increases exponentially. The hope that all of this will be corrected over the next few years helps to manage this stress, but when you are retired, it is not easy.
Evelyne Bundock
We will be able to succeed
Reduce expenses, reduce savings and focus on paying down debt which has increased after two new additions to the family and maternity leave. I am optimistic that we will be able to succeed. We are not in a bad position.
Gabriel Lefebvre
The impact of inflation on the stock market
For the past 10 years, I have made the decision to invest in the stock market instead of paying my line of credit. With titles like those of CGI (GIG.a) or Dollarama (DOL) I had a yield that exceeded 15%. So, it was easy to make the decision to keep my money in my RRSP rather than paying my line of credit at a rate of 1.85%. Now that the key rate is rising, we just have to see if it is still advantageous to have a line of credit with an interest rate of 5 or 6% while maintaining a solid return on the stock market. For now, I will continue to monitor the impact of inflation on stock market securities and continue to invest in TSX-60 securities.
Alain Bellemare, Sainte-Julie
Prices that affect my quality of life
For me, having no debt, raising interest rates to curb inflation is good news. It’s the explosion of the consumer price index that is hurting my wallet and therefore affecting my quality of life. Rising interest rates also provide better returns on certain investments.
Dominic Gagnon, Saguenay