Rising interest rates, good or bad news?

What impact will the Bank of Canada’s rate hike this week have on your portfolio? The misfortune of some is the happiness of others. While some will have to reduce spending or even relocate, others will increase their interest income. Here are your comments.

Posted at 3:00 p.m

Worst of all are the young families who have just entered the market and have been ill-advised to buy a home at a price sometimes 30% higher than the advertised price.

Marc Ladurantaye, Val d’Or

Live beyond his means

I bought a house in 1998 and paid 6.5% fixed rate on my mortgage and when I renewed it I got 4.1%. I quickly paid off my house and, aware of the impact of compound interest, decided to put all of my savings on my mortgage. However, I have seen many households borrow large sums of money so that today the mortgage has exceeded the original price of the house. Even with the current prime rate, mortgage rates are still very low. What worries me is that all the money I’ve saved isn’t worth much because of inflation, and I think the Bank of Canada should have acted sooner. Many people live beyond their financial means. This overheating of consumption does not contribute to the reduction of greenhouse gases.

Carole Vary

Changed plans

On the eve of retirement and still with a mortgage, we changed our plans: no travel, no new electric car, and now we’re going through the grocery store flyers. In short, we want to reduce our spending in the hope that many will follow suit and help reduce demand and therefore inflation.

Marie-Claire Fortin, Montreal

On the hook of our banking institutions

On the one hand the government gives us 10% more pension for our old age pension, on the other hand the Bank of Canada takes the money away from us. We wanted to live in our house, now we have to think about it. Selling and renting out a four-and-a-half year old for $1,500 a month? We are on the hook of our banking institutions. Let’s hope at 80 that our health will allow us to bear this inflation.

Bob Picher

Good news !

For me, the interest rate hike is good news! My husband and I have investments that will increase interest rates. We have no debts, because buying without money is not one of 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. To me the 100 point rise is an excellent thing, the Guaranteed Investment Certificates (GICs) that I own and the yield on which helps me cover some of the rise in inflation will probably fetch a little more than crumbs as was the case in the past years. Then I will finally be rewarded for having “saved for retirement”.

Pierre Daignault

Prices not high enough

At the risk of being a bit shocking… If we apply ‘breaking point’ logic and see consumer spending frenzy, I believe prices aren’t high enough yet. Wanting everything, now, with prices adjusting to demand. If I were still in business I would raise my prices to breaking point…and be dissatisfied with every sale because I didn’t think my price was high enough! Keep this in mind when making a purchase decision, because as a wise man once said: “Do you really need this?” »

Daniel Korbeil

Let the course skyrocket

If it can alert us to our overconsumption, then good. Otherwise, if the rate skyrockets, it might 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 the following years the mortgage rate reached 23%. So with people complaining that it’s close to 5%, I can only think we should think 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 will withdraw another $200 later in the week…. Maybe $300 because inflation goes down quicker…light stress. But when you look at your investment portfolio, the fruit of a lifetime of work that ‘depreciates big’ week by week, the stress levels rise exponentially. Hoping that all of this will be corrected over the next few years helps manage that stress, but when you’re in retirement, it’s not easy.

Evelyne Bundock

We will be successful

Cut back on spending, cut back on savings and focus on paying off the debt that has mounted after two new additions to the family and maternity leave. I am optimistic that we will succeed. We’re not in a bad position.

Gabriel Lefebvre

The Effects of Inflation on the Stock Market

For the last 10 years I have made the decision to invest in the stock market instead of paying my line of credit. On titles like CGI (GIG.a) or Dollarama (DOL) I had a yield of over 15%. Therefore, it was easy to make the decision to keep my money in my RRSP instead of paying my line of credit at a 1.85% rate. Now that the federal funds rate is going up, we just have to see if it’s still beneficial to have a line of credit with a 5% or 6% interest rate while earning a solid return in the stock market. For now, I will continue to monitor the impact of inflation on equity market securities and will continue to invest in TSX-60 securities.

Alain Bellemare, Sainte Julie

Prices that affect my quality of life

Since I have no debt, raising interest rates to curb inflation is good news for me. It’s the CPI explosion that’s hurting my wallet and my quality of life. Rising interest rates also ensure better returns on certain investments.

Dominic Gagnon, Saguenay

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