Episode 86: How do rising interest rates affect you?
Your Canadian Retirement Specialist
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Show Notes
Anyone with a variable rate mortgage in Canada understands the impact of rising interest rates.
A rate hike can either cause borrowers' debt payments to climb or reduce the amount of principal their mortgage payments pay off. Interest rate rises are caused when the Bank of Canada decides to increase its overnight rate, which is a short-term interest rate that factors into lending costs. Depending on the economic circumstances, interest rates can rise substantially over a year.
Most people are aware that rising interest rates have an impact on mortgage costs: variable rates typically rise in line with the overnight rate, and it can also become more expensive to renew a fixed rate mortgage. However, higher interest rates can impact other aspects of our lives as well.
What should you do during periods of rising interest rates?
You should speak with an IG advisor to discuss how rising interest rates might impact your portfolio. They can provide advice and suggestions to deliver better returns in a higher-rate environment.
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Regan Schiller holds his Certified Financial Planner, Registered Retirement Consultant and Certified Life Underwriter designations. He is an Executive Financial Consultant licensed under Investors Group Securities Inc.
Mutual funds and investment products and services are offered through Investors Group Financial Services Inc. (in Québec, a Financial Services firm). Additional investment products and brokerage services are offered through Investors Group Securities Inc. (in Québec, a firm in Financial Planning). Investors Group Securities Inc. is a member of the Canadian Investor Protection Fund. Commissions, fees and expenses may be associated with mutual fund investments. Read the prospectus before investing. Mutual funds are not guaranteed, values change frequently, and past performance may not be repeated.
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