Canadian interest rates are at a new high. On July 11, 2018, the Bank of Canada (BOC) interest rate rose to 1.5%.

This is still a relatively low interest rate, but if you’re struggling with debt it could mean trouble.

Canadian interest rates affect floating, or unsecured, debt. This could be anything from credit card bills to variable-rate mortgages to certain lines of credit. If you have debt with a fluctuating rate that changes month to month, the BOC interest rate will likely affect you.

At the start of 2018, Canadian household debt levels were at a record high. But since interest rates have increased, those debt levels have dropped. With higher interest rates and stricter mortgage lending guidelines, people aren’t able to take out as much debt. Plus, wages are up, which is also helping.

But even as the interest rate increases are working to bring down Canadian household debt, debt levels are still high. If you’re struggling to make ends meet, you might be wondering how to consolidate debt.

Debt consolidation can take all of your unsecured, outstanding payments — credit cards, lines of credit, etc. — and put them into one lump sum.

With debt consolidation, you could:

• Take out a loan with a fixed interest rate (that won’t change with BOC increases).
• Use that money to pay off your other high-interest debts.
• You would still need to repay that loan, but you would be able to plan for it.

Higher interest rates can also affect mortgage refinancing and renewals. For instance, if you got your current mortgage rate five years ago and it’s now up for renewal, your lender may tell you that you have to renew at a higher rate.

And any new debt you take out with a big Canadian bank may be higher. The raise to 1.5% is expected to encourage big banks to raise their prime lending rate as well, so it will be more expensive to take on new debt.

If you can’t repay your current debt, your credit score will be affected, which will also worsen your financial situation.

In any of these cases, debt consolidation, mortgage renewal, or wanting to take out new debt but not having the means to pay it off, DebtCare Canada can help. We have always provided independent advice to our clients, considered all their options and we then recommend only what is in your best interest.

We specialize in offering financial help to people with all types of credit and income. In addition we are now able to provide you with first mortgages, second mortgages, debt consolidation loans, and much, much more.

This BOC interest rate increase is only the beginning. Interest rates will be increasing further in the future, so don’t wait to get a handle on your debt.

Contact us today to get started. Call 1-888-890-0888 or visit www.debtcare.ca.