Who’s to say whether it’s our dedication to paying our dues or just wishful thinking, but a new BMO survey shows that 54 per cent of expect to pay off our debt in just five years – and that includes mortgages and second mortgages!
The survey was conducted by Leger Marketing for BMO; and in addition to showing that more than half of us expect to be debt-free by 2017, it also showed that the average current debt we hold is $112,329 per person. It also showed that when it comes to very large debt loads, men are more likely to carry the heavier load with 30 per cent of men saying that they had debt over $100,000. Just 22 per cent of women said the same thing. And men in the 35-44 age group? They’re even more likely to carry high levels of debt, with 43 per cent saying that they currently owed more than $100,000.
But the news just keeps getting better. The survey also showed that 25 per cent of Canadians were already debt-free; and only 26 per cent of participants said that they had debt loads of more than $100,000. Those who are currently making debt payments are paying an average of $1,138.49 each month towards their debt.
The BMO survey also quoted Statistics Canada in the report accompanying the survey. This citation showed that 63 per cent of debt went to Ottawa mortgages and mortgage debt around the country – something it considers to be good debt. On the other hand, only 28 per cent of debt was consumer debt, or bad debt.
Within all the good news that the BMO survey revealed, there was still one discouraging piece of data. That was the fact that the study showed that while 70 per cent of Canadians say they can afford to make the minimum monthly payment on their debt, only 30 per cent of us are. BMO calls it “treading water” when a person is only making the minimum; and the person is most likely sinking if they’re not paying any – something that 40 per cent of those in debt are doing.
“While debt is a part of life for the majority of Canadians, it doesn’t have to be a permanent fixture,” said Su McVey, Vice President of Bank of Montreal in a statement accompanying the survey. “While interest rates have likely kept debt loads manageable for many households, that picture may be poised to change in the coming year.”
Or maybe not. Bank of Canada Governor, Mark Carney, announced on Tuesday with his rate announcement that due to uncertain global economic conditions, the Bank may have to hold off on raising the interest rate for the time being.
