An increase in the key interest rate to 3%?

An increase in the key interest rate to 3%?

Higher interest rates are the price to pay for fighting inflation, our readers essentially believe. And many of them have prepared accordingly. Here is an overview of the emails received in our Call to All.

written in the sky

It was written in heaven that rates would go up one day. The economy is cyclical and the latest has broken all longevity records with its rates at the bottom. Now, we have to come back down to earth and take on the raises to come. These increases are sure to hurt because Canadians’ over-indebtedness will have serious consequences for many.

Christian Boily, Rouyn-Noranda

too late

The Bank of Canada has already taken too long to raise interest rates. Also, it now fits with what I consider to be inappropriate magnifications. It would have been necessary this week to go there for 75 basis points for a strong signal. I am retired and inflation is my worst enemy. I also remember the 20% interest rate on mortgages in the early 1980s.

Yves Bourassa Mauricie

a little breath

I expect the bank to raise its rates to at least 3%. Real estate prices have skyrocketed, in part due to low interest rates. Thus, it is very difficult for our young people to have access to property. This increase will certainly have the effect of seeing house prices fall. In addition, there should be an impact on the level of consumption, which should also decrease. It should, by extension, have an impact on manufacturing output. So less GHG in the atmosphere and maybe a little respite from labor shortages.

Andre Harvey

price to pay

This is the price to pay for trying to fight inflation. Much easier than paying more than 6% inflation that applies to everything, not just our mortgages and debts.

Pierre Huot, Cowansville

Manage inflation better

We are satisfied with the rise in interest rates. Being retired will allow us to better manage inflation without dipping into our estate money set aside for our daughter and granddaughters.

Ginette Proteau

very volatile

Rising interest rates are already having an impact on the number of properties for sale. In our region, there were 395 properties for sale last December. There are currently more than 600. Before the pandemic there were more than 1,000. So the market seems to be slowing down. If the key rate goes up to 3%, there will be fewer buyers. Those who need to renew their mortgage will see their monthly payment go up, that’s for sure. In my case, the stock markets have been very volatile since January and my pension fund is going down very fast. Enough to tell me that as soon as there is a pause in the stock market, I will invest in safe investments that will yield less but will allow me to receive regular returns!

Serge Leduc, Pincourt

Deja vu

How am I going to absorb a 3% rise in interest rates? Simply having a good coffee and thinking about the people who are going to complain about this increase. In 1983, young people of the time paid 20% of our mortgages. People living beyond their means were not amused, and some had to put their house keys in the bank, others low profile, they simply have to lower the amount of their mortgage to maintain the same monthly payments. It will be the same today. Young people want a big house, two cars, trips to the South, purebred dogs, and they are going to find their pants on the floor, even if interest rates go up a few percentage points. Consider yourselves lucky, young people, that this future interest rate hike isn’t as high as the 20% of 1983. You’re fat and don’t even know it.

Guy Sirois, Quebec

save the day

Our daughter bought a house immediately after a horrendous oversupply that was $150,000 over the sale price… Every time the interest rate increases by 1%, her monthly mortgage payments increase by $350. With a 2% increase, we reach $700 per month. She has already reached, to finally get a house after having lost many times before due to the buying spree, the maximum of her ability to pay. It is not unforeseen in such a situation. We had warned her but she remained confident that the possible uprising would not take place. Who do you think she will absorb the deficit to avoid bank default and financial recovery? Nearly $10,000 a year with that interest rate hike to 3%, just to save the day. We’re a long way from Mr. Legault’s $500 gift!


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