Many Canadians teetering on the edge of insolvency - study

Many Canadians teetering on the edge of insolvency - study

Many Canadians teetering on the edge of insolvency - study In its latest survey, Manulife Bank of Canada found that over one-third of Canadians will find it challenging to pay their regular bills in three months or less if the household’s main wage earner gets laid off.
 
The study further found that more than 16 per cent will have problems with servicing existing debts if their current mortgage payments increase in any way (even if their breadwinners continue working), BNN reported.
 
The results underscored the risk of insolvency that more and more Canadians—especially millennials, with 83 per cent of the survey respondents in the 20-34 age group carrying mortgage debt—seem to find themselves facing amid ever-growing costs and static incomes.
 
“The survey results [are] more reflective of monthly mortgage costs — which are a function of debt and interest rates,” Manulife Canada Chief Investment Strategist Philip Petursson wrote in the data release. “Perhaps the emphasis is misplaced on interest rates, given the fact that interest rates are at decade lows, as opposed to the real driver of higher mortgage costs, which is housing prices.”
 
Manulife officials advised home owners and consumers to consider various options that can help them weather the worst-case scenario.
 
“A financial buffer is an important part of a financial plan,” Manulife Bank of Canada CEO Rick Lunny said. “A high-interest savings account is a good option. Or, if you’ve got a home equity line of credit, you could use your savings to reduce your debt and save interest — and still have access to that money if an emergency arises.”

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