Image Credit: UNSPLASH/Michelle Spollen

One-quarter of B.C. residents say rising interest rates and inflation means they are cutting back on essentials such as food, utilities and housing.

And almost half of British Columbians say they are cutting back on non-essentials such as travelling, dining out, and entertainment.

The data compiled by market research company Ipsos on behalf of insolvency practice MNP LTD, also found that 59 per cent of B.C. residents say they are already feeling the effects of interest rate increases, and 26 per cent said they are not financially prepared to deal with an interest rate increase of one percentage point.

"Housing is more expensive, driving a car is more expensive, food is more expensive; no matter where British Columbians look, there is no relief," MNP licensed insolvency Trustee Linda Paul said in a media release issued today, July 11. 

"While many households in B.C. are trying to adjust their budgets by cutting costs where they can, as the cost of living continues to rise and it’s likely to get worse before it gets better, households will have to make even tougher decisions about what to cut, and could find themselves piling on debt to keep up with their monthly bills."

The survey also found that almost half of British Columbians are concerned about their current level of debt, and 44 per cent regret the amount of debt they've taken on.

READ MORE: How Kamloops, Okanagan governments raise prices of new homes

A separate Ipsos survey also found that one in four homeowners with a mortgage were confused about what rising interest rates meant to them.

Almost a quarter of homeowners with a mortgage said that interest rates didn't impact them.

Ipsos points out that the findings highlight that many Canadians are seemingly in the dark about how interest rates impact their household budget.

However, aspiring homeowners seemed to understand the impact of rising interest rates, with three-quarters of those looking to buy a home worried that interest rates would affect what they could afford.

The vast majority of Canadians do agree with the cooling housing market, with 83 per cent saying they are glad the market is stabilizing.

While the market is cooling, more than half of Canadians said they'd still pay over asking for a home, with 21 per cent saying they'd pay $50,000 more than the listed price. Six per cent said they'd pay $100,000 over asking.

READ MORE: Okanagan luxury home buyers taking a breather amid inflation, rising interest rates

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