Friday, February 11, 2011

B.C. Most Indebted

B.C. Most Indebted
B.C. households are the most vulnerable in Canada to interestrate hikes or an economic downturn, says a new report released Wednesday by TD Economics. B.C.'s debt-to-income ratio -which compares all debt including mortgage debt to personal disposable income -is 160 per cent. That's the same level reached in the United States just before the financial crisis and housing meltdown hit....The number of clients seeking help with their debt from the society, a non-profit organization that helps people find solutions to debt and money problems, has skyrocketed in four years."In 2007 we were seeing 500 new clients a month. Now it's 2,000. In the last 90 days we've seen 50-per-cent more people looking for help. It's huge and we're going to be hiring an additional 20 staff to deal with demand," he said.Hannah said if interest rates rise by two per cent, many people will be seriously affected."In the early '80s we saw interest rates of 18 per cent. But that was on mortgages of $70,000. If rates jump to seven per cent on mortgages of $400,000 is there much of a difference?"

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