The proportion of Canadians who regret their current debt levels has reached its greatest level in recent history, according to the latest Consumer Debt Index by insolvency practice MNP LTD.
The study found that approximately 40% of Canadians are concerned about their existing debt loads, and 43% regretted the amount of debt that they have incurred in their lives.
This was the highest ratio ever since MNP started taking stock of this metric in June 2017.
“Rising interest rates have forced people to take a more serious look at their debts. Still, many are reluctant to get professional help. They may not know where to go or they feel helpless,” MNP LTD president Grant Bazian stated.
The index also reported that 1/3 of Canadians are concerned that rising rates could push them towards bankruptcy. Rising rates will also affect their ability to service their existing debts, according to 52% of respondents.
“It’s been over a year now since the first interest rate increase and as rates continue to inch higher, more Canadians are feeling it. With little decrease in household debt and the pace of rate hikes expected to accelerate, we will likely see a more immediate and significant effect on borrowers with rate increases in the future,” Bazian explained.
Read more: B.C. home owners feel the weight of rising rates most strongly
These fears are weighing the most upon younger consumers, with 50% of millennials saying that they are already feeling considerable pressure from interest rate hikes, compared to 48% of Gen X’ers and 38% of boomers.
Canadians in the 18-34 age bracket are also more likely to express concern about interest rate hikes and their impact on debt repayments (62% of millennials compared to 57% of Gen X’ers and 40% of boomers), or the risk of bankruptcy (46% of millennials vs. 38% of Gen X’ers and 22% of boomers).
“Millennials have never experienced a time when credit wasn’t cheap and easily accessible. Some have over extended themselves on their homes and vehicle payments and are in the habit of relying on credit to cope with any kind of unexpected expense,” Bazian said.