Atlantic Canadians spend less on interest payments on debt, says APEC

A new report by the Atlantic Provinces Economic Council (APEC) says Atlantic Canadians are better prepared financially for a jump in interest rates on average than most Canadians.

The report shows just six per cent of Atlantic Canadians’ disposable income is going to interest payments on debt, compared to seven per cent nationally.

APEC Senior Economist David Chaundy says lower housing prices in this region is a big reason why.

“When you look at average home prices relative to income, they're much lower here. The average mortgage was $110,000 in 2012. Nationally, it's $167,000. So, because our mortgages are lower, because we've got lower home prices, our overall debt-service ratios are somewhat lower,” he said.

Chaundy cautions that Atlantic Canadians shouldn't get too comfortable. He says while interest rates are relatively low right now, we should ready ourselves for a jump in the next couple of years.

Chaundy says Canadians with high debt-to-income ratios could be in trouble if interest rates start to rise. APEC predicts that will happen sometime in 2016.