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This slideshow will be showing you how loans and interest affects you as a consumer and a tax payer. It will show you this in three different ways such as websites, videos, and images.

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In this article you will be shown multiple different diagrams and charts as to how we are being affected by higher interest rates as well as what we are doing to have the interest rates go up like this. Also you will be shown what we different quotes about what people are saying about this which does help get a better understanding of this as you are being able to relate what you have to think about this topic to what other people are having to say. Having all this information and being able to dispute it multiple different ways is a huge key part because it helps you visually see our statistics.

The reason that i had chose this website is because me myself i like to see a lot of diagrams when i am reading something because it does help me understand it a lot more because i am a visually learner. One of my favorite things about this article is how it talks about one of the main reasons households stayed wealthy is from investing into different things such as stocks.

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Household wealth rises but financial data from Statistics Canada show 'pressures will remain intense'

Canadians are wealthier thanks to stock and bond markets - or at least some of them.

Total household net worth rose 1.8 per cent to $16.4 trillion "driven by strength in financial markets as both bonds and equities rallied," Statistics Canada said in its release of data on household finances for the fourth quarter - adding the caveat that "most wealth is held by relatively few households in Canada."

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But digging deeper into the Statistics Canada numbers suggests another financial reality, one where higher interest rates continue to take a toll on people's wallets and shape consumer behaviour.

"Pressures will remain intense for many Canadian households still grappling with the delayed impact of previous interest rate hikes," Carrie Freestone, an economist with Royal Bank of Canada, said in a note on the data.

The following five charts tell some of the tale of where household finances stand and what they could look like in the quarters ahead.

Debt to income

Canada's household debt-to-income ratio fell to 178.7 per cent in the fourth quarter from 179.2 per cent in the third. That means that for every $1 of disposable income, Canadians owe $1.79.

Growth in income, up 1.3 per cent from the quarter before, exceeded growth in debt, which was up 1 per cent.

Statistics Canada cited "relatively slow mortgage borrowing " for the slower pace, and some economists expect that to continue in the near term.

"We anticipate that mortgage demand will remain soft, supporting further improvements in debt metrics, until rates begin to fall around the middle of the year," Shelly Kaushik, an economist at Bank of Montreal, said in a note.

Debt service ratio

The debt service ratio, measured as payments of principal and interest on debt as a share of household disposable income, edged up to 15 per cent in the fourth quarter, pulled by rising interest rates.

In the fourth quarter, mortgage interest made up 66.2 per cent of total mortgage debt payments, up from 45.8 per cent in the fourth quarter of 2021, Statistics Canada said.

Mortgage principal payments declined steadily through 2022 before stabilizing in the second half of 2023. They came in at $12.4 billion, unchanged from the third quarter.

"On the bright side, these relative measures of mortgage debt service cost broadly stabilized in Q4 for the first time since the Bank (of Canada) kicked off the current rate hiking cycle," Randall Bartlett, senior director of Canadian economics at Desjardins Group, said in a note.

The debt-service ratio has barely moved over the last three quarters, which RBC's Freestone attributes to higher incomes. But she doesn't think this will last.

"Moving forward, we do not expect the current pace of income growth to be sustained," she said. "We continue to expect Canada's debt-service ratio to rise from recent levels."

Credit market debt

Credit market debt increased by $29.5 billion in the fourth quarter, with mortgages mainly accounting for $21.3 billion of that amount.

The remainder of the increase - $8.2 billion - came from "households seeking consumer credit," Statistics Canada said.

Consumer credit rose for the second straight quarter and the $8.2 billion was "the second-largest net origination of consumer credit since 2009," said the agency.

That jump in borrowing could spell trouble.

"This is concerning, as it suggests many Canadian households may be increasingly stretched," Bartlett said.

Saving rate

Canada's saving rate "remains resilient," Statistics Canada said.

At 6.2 per cent it was "little changed" from the quarter before, but well up from 5.6 per cent at the end of 2022.

It was a "strong" quarter for household holdings of currency and deposits, which increased 2.4 per cent, said the agency.

Bartlett at Desjardins said the reason the saving rate is "still elevated" is because there are still a large number of Canadians who need to renegotiate their mortgages this year.

"We think Canadians are well aware of this looming drag on their household finances," he said.

Total financial assets

Households ended the year wealthier thanks to stock and bond markets that rallied after falling in the third quarter.

As a result, the value of financial assets rose to a record high of $9.7 trillion, "surpassing the previous record set in the fourth quarter of 2021," the national data agency said.

Residential real estate, however, continued to drag on household wealth with its value falling to $157.8 billion.

Toronto-Dominion Bank thinks Canadians can expect another quarter of rising wealth to start the year.

"Home prices have been moving higher in the last three months, recovering from last year's pullback as housing activity snapped back on easier financial conditions and lower mortgage rates," Maria Solovieva, an economist at TD, said.

She believes equities will continue to rise, especially in the United States, where pessimism regarding the economy is receding.

"Assuming March doesn't break the trend, we expect Q1 2024 to deliver another quarter of wealth gains, marginally supporting consumer spending," Solovieva said.

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Canada is unlikely to meet its deficit goals unless it makes substantial spending cuts or finds new sources of revenue, according to the country's largest financial co-operative.

An "outsized pace of spending" means Canada is on course to run a budget shortfall of about $47 billion for the fiscal year that ends March 31, according to estimates released Thursday by Desjardins.

The projection raises more questions about how Finance Minister Chrystia Freeland will meet her pledge to keep the country's budget shortfall at around $40 billion a year from now until 2026.

"I think it's going to be an exercise in creative accounting," Randall Bartlett, Desjardins' senior director of Canadian economics, who wrote the research note, said in an interview. "They either need to cut spending or increase revenues to make this work." - Bloomberg
Read the full story here.

United States ambassador to Canada David Cohen gives a speech at the Greater Vancouver Board of Trade on cross-border collaboration in life sciences and technology

Today's data: Statistics Canada releases data on international securities transactions and wholesale sales; Canada Mortgage and Housing Corporation releases housing starts for January

Earnings: Aimia Inc., The Keg Royalties Income Fund, EQB Inc., Li-Cycle Holdings Corp., Groupon Inc.

1. More Canadians worried about defaulting on their mortgage: poll

2. Canada's housing market 'recovery' gets a reality check

A taxpayer found out the hard way that ignorance isn't bliss when the Canada Revenue Agency hit her with a penalty for over-contributing to her Tax Free Savings Account even though she claimed to have been ignorant of the rules. Tax expert Jamie Golombek has all the details here.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at aholloway@postmedia.com with your contact info and the general gist of your problem and we'll try to find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Read them here
Today's Posthaste was written by Gigi Suhanic, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.
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Posthaste: 5 charts that show how Canadians are and aren't coping with higher interest rates

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Canadian household wealth rises, but data also show how higher interest rates are taking a toll on personal finances. Read more

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How interest rates are affected by inflation

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How interest rates are affected by inflation

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This article is an amazing one due to the fact that everyone now a days is wondering why everything is so expensive and saying how the inflation on all these items are crazy. This article really breaks down why inflation is a thing and how it is being created in our lives now, as well as its talking to us about how the inflation of everything is making the interest rates increase as well and it is due to the fact the the firms have to order materials and supplies to but with the inflation they have to pay more for everything which means they need to make money somehow.

My favorite part about this article is that it answers a lot of people questions by using facts such as why companies have to make interest rates higher so that they can afford to stay in business as well as the companies polices.

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How higher interest rates affect inflation

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When the Bank of Canada changes its policy interest rate, it affects every part of the economy - but that does not happen all at once. Learn more about how raising and lowering interest rates takes effect through the monetary policy transmission mechanism.

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This website does a very good job at communicating how the government of Canada charge interest as well as how many things the government charges interest on. This website is amazing because it makes us think about how many things were really getting charged interest on and it makes us think how many times we make these kinds of decisions knowing were getting charged interest. It also shows us how the Canadian government does take interest on items and how much interest they take. It also talks about how the CRA goes about it if someone were to be penalized for not paying interest.

This website is a very good article just for the simple fact and my favorite part, that it is coming straight from the Canadian Government, which makes it good because you know it is coming from the facts and not just someone stating their opinion.

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Information for corporations concerning different situations that may result in interest being charged, refunded, forgiven, cancelled or waived and information on pertinent loan or indebtedness elections.

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This is website does a good job explaining how to deal with high interest rates as well as why the interest rates are high due to inflation. This is a good article for Canadians considering that David Sklar and Associates is one of the most reliable and most popular firms. This page does a really good job describing how to deal with these things as well as it describes how to deal with the inflation rates and high interest rates and if it affects your credit card score and anything to do with banking, At the same time it gives you a reliable source of what to do and how you can deal with these things.

My favorite thing about this article is that, As much as it talks about how everything has gone up in price like inflation and interest rates it does a very good job trying to help us out in making good decisions in how to deal with these things and how to handle them.

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Inflation is having a major impact on Canadians' everyday lives, and people are increasingly worried about the long-term impact it will have on their finances. Inflation is the rising cost of goods and services. That puts pressure on Canadians' budgets, and a new Angus Reid survey shows that two-in-five Canadians feel worse off in January 2022 than they were in 2021.

Inflation anxiety isn't limited to rising prices in the face of wages that can't keep up. At the same time that essentials are rising in price, there are worries that interest rates could start rising as well, and that can make carrying debt much more expensive.

How Does Inflation Affect Interest Rates?

High inflation is a problem for Canadians because of the pressure it puts on their budgets. In the face of rising costs, incomes don't stretch as far as they used to. But that's not the only concern. Forward-thinking Canadians are also worried about the effect higher inflation can have on their debt.

The Bank of Canada has a policy goal of keeping inflation under control, and the primary tool they use to control inflation is interest rates. Interest rates determine how expensive it is to carry credit. When credit is cheap, it's easier for people and businesses to borrow money. This means more money is flowing through the economy as people buy more goods and businesses expand. It helps the economy grow, which is why we see low interest rates during recessions and throughout the pandemic, but this heightened demand for goods and services can also lead to inflation.

By making credit more expensive, the Bank of Canada is tightening the flow of new money into the economy. As credit slows down, the rate of inflation ideally slows down as well. In order to prevent inflation from speeding up in the year ahead, the Bank of Canada is likely to raise interest rates in the opinions of most observers.

The problem is that people carrying debt or looking to borrow now face higher costs for servicing their debt. Families with high household debt in Canada may face higher monthly payments on a variety of debt, including personal loans, car loans, mortgages, and lines of credit.

What Inflation and Interest Rates Mean for Your Finances

High inflation rates can change the monthly payments you have to make to service your debt. The impact of higher interest rates can hit variable rate loans right away.

The combination of higher interest rates and inflation, even if it slows, can put families in a very difficult position where they can't keep up with their debt payments.

If you find yourself in this position, it may be time to speak with the debt professionals at David Sklar & Associates. There are debt relief options you can explore when you can no longer keep up with your payments. Sometimes your financial situation changes for reasons you can't control. When you're struggling, there are ways you can deal with debt that you can no longer afford.

Do Higher Interest Rates and Inflation Affect Your Credit Card Debt?

Changing interest rates have a direct impact on any variable rate debts you have. A variable rate is the prime lending rate (the rate at which the Bank of Canada lends money to the financial institutions that work with consumers) plus interest charged by the financial institution. When the prime rate rises or falls, the interest rate you pay changes as well.

Fixed-rate debts are not affected by rising interest rates until you have to renew the terms, such as on a mortgage. Most credit cards and payday loans have fixed interest rates in Canada, but some low-interest cards do come with variable rates. Home equity lines of credit (HELOCs) are usually variable, and student loans tend to have a variable component, as the prime rate is used in the federal component. When it comes to personal loans and mortgages, borrowers can often get a lower interest rate by taking a variable option, but they can quickly see higher monthly payments if the prime rate goes up.

How Inflation and Interest Rates in Canada Can Make Your Mortgage Unaffordable

When many people buy a home, they look less at the price of the property than their monthly payment. Especially in today's world of sky-high real estate prices, homebuyers get past the sticker shock by focusing on the monthly payment.

The problem is that Bank of Canada interest hikes will lead to that number climbing higher. If you have a variable interest rate, your mortgage can change overnight, but even if it's fixed, you can face much higher costs when you renew. Even if you had a fixed rate mortgage, most mortgages need to be renewed at least once, where the bank offers you a new rate and terms.

For thousands of Canadian homebuyers who bought property at record-high prices and record-low interest rates, the prospect of an interest rate hike can be daunting. New mortgage terms can make a big difference on your new monthly payment, and they can throw your budget into disarray if you weren't expecting it.

A substantial interest rate hike can quickly lead to mortgage arrears, where you're unable to keep up with your payments, and you wind up owing back payments on your mortgage. It's a very difficult position to be in, and it jeopardizes ownership of your home.

Secured debt such as a mortgage can be harder to deal with than unsecured debts such as credit cards. With the help of a Licensed Insolvency Trustee, you can erase debts in Canada through a consumer proposal or bankruptcy, but debts with collateral cannot be included in insolvency proceedings unless you give up the asset.

How a Licensed Insolvency Trustee Can Help You Deal with Higher Interest Rates

Your mortgage is likely the largest debt you have that will be affected by higher interest rates, though Home Equity Lines of Credit and auto loans can also be affected. However, carrying other, unsecured types of debt such as credit cards or payday loans can make it harder to keep up with those payments, as your income is stretched thin and much of your payments are going to interest charges instead of the amount you initially borrowed.

By taking action on your other debts, you have a better chance of keeping up with essential payments like your mortgage. But given the options available, you should be careful about how you proceed so that you don't end up hurting your financial future.

Debt Settlement: Why You Should be Careful

Debt settlement in Canada is one of the options you're likely to encounter when you're looking for ways out of debt. How debt settlement works is that you hire a debt settlement company to negotiate reduced interest rates with your creditors or even reduce the total amount you owe.

However, it comes with several major risks if your creditors choose not to negotiate. First of all, sometimes debt settlement companies collect the money you would have paid to the creditors but withhold it as a negotiating tactic. During this time, your creditors can still take actions to collect, such as wage garnishment, all while penalties continue to accumulate. Non-payments are reported to the credit bureaus, affecting your credit score, and creditors such as the Canada Revenue Agency won't negotiate with debt settlement companies at all.

Consumer Proposal Services and Bankruptcy

As higher inflation and interest rates in Canada put pressure on your budget, it's time to get serious about getting out of debt. When you're not worried about debt, it's easier to budget for higher essential costs and keep up with everything. Getting out of credit card debt will help you take back control of your finances.

When you can't afford your debt, a consumer proposal or bankruptcy can be an expedient way to resolve the situation. In a consumer proposal, you make a monthly payment within your means which is divided between your creditors. If your creditors agree to the proposal, you can see a significant reduction in the principal that you, while also benefiting from zero interest rate charges.

Consumer proposals have become the most popular way for Canadians to seek protection through insolvency proceedings, but bankruptcy can also make sense as an alternative. The trade-off with bankruptcy is that you may have to give up non-exempt assets, with the proceeds going to your creditors. There are cases where it can make sense to opt for bankruptcy first, especially if you have few non-exempt assets.

To learn more about bankruptcy or consumer proposal services in Toronto and the GTA, book a free consultation with a Licensed Insolvency Trustee. We'll learn about the specifics of your financial situation and work with you on the right solution for your debt. As your everyday costs get more expensive with inflation, the best way to prepare is to free up more of your income by getting debt-free as soon as possible.

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Interest and Inflation in Canada | David Sklar & Associates

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Inflation & rising interest rates in Canada can have an impact on your budget & ability to keep up with debt. We can help you develop a plan.

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This video does a great job showing that everyone is being touched and affected by these circumstances such as inflation and interest rates, even when going to buy, rent, or even sell your house the interest rates have gone up since last year even though the house prices have dropped your still giving a lot of money due to interest rates and it is making it hard for some people to afford which is the reason for them selling their house. Just due to the fact that most if not all of the mortgages have gotten more expensive due to interest rates and making it harder to make a living decision.

The best thing about this video even though it is very short it gets the point across and makes sure that everyone is understanding what is going on around the country right now with everything going up in prices which is making it affect everyone's cost of living not just by groceries but by housing too.

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How are higher interest lending rates affecting Canadian homeowners?

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This video does an amazing job describing how the banks decide the interest percentage at the certain bank and what makes the interest rate go up at certain banks and what makes it lower at other banks. It also does a good job with showing that this is not just Canadians having this problem it happens all around the world and shows how this effects the economy because when interest rates rise it makes it harder for people to afford as many things which means these companies are not making as much money which is the reasoning behind the increase of inflation.

The thing that really makes this video good is that it is not just showing the stats and how this works in Canada it shows that this affect has taken a tole on the whole world and our economy as a whole.

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How does raising interest rates control inflation?

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Why aren't interest rates dropping in Canada

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Why aren't interest rates dropping in Canada

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This video talks very heavily about how the interest rates have so much to do with how many people can afford stuff because there is a lot of things that the country is trying to bring in that everyone can afford and the government is spending this money to bring in these products even though a lot of the economy can afford it, which makes the reason for inflation easy to explain because everyone can afford it but there isn't enough for everyone to purchase it. Which is how the bank of Canada tries to control this problem because they figure that buying increasing interest rates not a lot of people will be purchasing all these other things because they will have to save to afford important stuff like interest rates.

This video does an amazing job describing the behind the scenes of why everything goes up in prices and trying to control the rates of inflation on groceries and food, so the bank figures that if we put up interest rates we wont have to pay for all this stuff to be coming to the country as often.

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Why aren't interest rates going down in Canada? | About That

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Interest affecting your mortgages and monthly payments

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Interest affecting your mortgages and monthly payments

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This video does a good job breaking down how interest rates affect your life day to day and how the interest rates work especially on if you get a loan on your mortgage and how the monthly payments are distributed on every mortgage payment so that the amount that you are paying into that loan it makes the interest rate of that payment less and less every month to be able to pay off that loan. This video also talks about the difference between just normal interest and the principal interest rate.

My favourite thing about this video is that he goes over the differnece between a 3%, 4%, and 5% interest rate. i feel like it makes this video important due to the fact that he is really going into depth about the difference of all the rates.

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How Do Interest Rates Affect Your Mortgage and Monthly Payment? Interest Rates Explained

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This image does a very good job describing the interest rate on houses over the years and makes us realize that the interest rate in 1980 was nearly 7 times worse than it is now, But then again inflation wasn't as high in those years.

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This image is just of the Bank of Canada, but in my opinion it does a good job describing this topic due to the fact that the bank has full control over our interest rates on everything and the reason they are high right now is because the price for everything is high right now.

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1. What did you learn about your topic that surprised you the most?

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1. What did you learn about your topic that surprised you the most?

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This topic really brought my attention to this issue, My opinion about this topic and something that surprised me the most is that the banks and government have everything to due with our interest rates as well as our economy and where we live and who we are as a person also decides those.

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2. Provide a real-life example of how this topic is relevant or interesting for you.

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2. Provide a real-life example of how this topic is relevant or interesting for you.

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This topic is relevant and interesting for me because, Its really opening my eyes about the future and making a lot of decisions of what i do in the future when looking to purchase a house or car or things that you have to pay interest on.

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3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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3. If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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I would really talk to my parents in case they ever plan on moving or deciding to get a new car i would really pass on to them that it is better to shop around and look for which places/firms can really give them the best interest rates so that we are able to not have to pay as much and save money as a family.