Debt Culture: Canada’s Growing Debt & Credit Problem

Canada’s growing debt problem is at an all time high. The net debt of the federal and all of the provincial governments combined is forecasted to be $2.0 trillion in the fiscal year 2020/21, nearly doubled from a little more than a decade ago. 

But what does high national debt mean for the average household?  

How Does The National Debt Affect You?

Consider this: The national debt affects businesses and citizens at multiple levels. More debt means more payment in interest for the money borrowed. When the government borrows money, they have to pay interest on their loan, just like how you pay interest on the money you borrow like the mortgage on your home, your car loan, or when you use your credit card. 

Therefore, when the government has to pay more money on their loan interest, that means they have less money to spend on programs for taxpayers like tax cuts, healthcare programs, social services and education. 

This can have profound effects on you as a Canadian citizen because that can mean taking more money from your pockets to pay for the services you need.

How else does this affect the Canadian taxpayer? When the government debt increases, long-term interest rates for the country can go up for everyone. That means it costs you more when you borrow money. 

If you are planning to buy a home, the rise in interest rates can greatly affect how much you are going to pay in your mortgage payment.

What Can You Do To Reduce Your Cost

There is not much you can do about the national debt, but there is something you can do to reduce its impact on you. 

If you plan to buy a house, you should look for a home loan that gives you the best loan terms in respect to interest rates and points. There are a couple of ways to do this. 

You can call different banks and financial institutions and ask for information on the loan packages they have. However, researching for those institutions and contacting them individually takes a lot of your time – time that you probably don’t have. 

The other solution and smarter approach, is to contact a reputable mortgage broker to help you find the best mortgage rates.

What A Mortgage Broker Can Do For You

The mortgage broker basically does all of the research for you. They have an extensive network of lenders whom they can contact to find out which one has loan terms that fit your needs the best. 

All you have to do is to fill out one application with the broker and provide basic information and documentation. When your application is complete, they turn to their network of lending institutions, determines which lender offers the best terms, and submits your application on your behalf for loan approval. 

The broker keeps track of the loan process. You just have to wait. 

Not only does this approach save you time, but you can potentially get a loan with terms that you would not even know existed if you were to do the research yourself. 
A local mortgage broker has information on many lenders that you might not know about. So, even though you can’t solve Canada’s growing debt problem, you can reduce its impact on you by working with an experienced mortgage broker.