When there was an offer of very low mortgage rates the past years, Canadians have rushed to get one. Well who could ignore that splendid offer? Unfortunately, these new home owners may not have taken into consideration that the housing market fluctuates and that low interest rate may have allowed them to purchase a home they really could not afford. When interest rates rise, these increased interest rates could cause those home owners to curb their spending in other areas, which could, potentially put a strain on the economy.
Although the low mortgage rate offer has helped the real estate industry in Canada and has aided in our recovery from the recession, in the future it may result in problems for some and may cause threat to other industry if people stop spending in other areas in order to pay their high debts and mortgages. To read more click here.
If people are not careful with regards to how they spend their money, they may find they have difficulty getting their feet back on the ground as their debt could consume them. So start saving and spend wisely!
Until next time,
Jamie
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