Margin Call if you have an adjustable mortgage…

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(Bloomberg) — At the height of the Covid-19 pandemic, with his job as a delivery driver bringing plenty of overtime and the cost to borrow at record lows, James Kebe went on a spending spree. He leased a boat and an all-terrain vehicle, and when his bank offered him a bigger line of credit, he maxed it out.Then interest rates started rising at their fastest pace in generations. And because Kebe’s line of credit had a floating rate, his monthly payments soared, too. The cost of his debt has now outpaced his take-home pay by C$900 ($660) a month, leaving him with little choice but to enter a form of creditor protection that will see his toys repossessed and keep him on a tight budget for the foreseeable future. “I’ve always been able to squeak by until now,” he said by phone from his home in West Kelowna, in the Canadian province of British Columbia. Now when he’s at the store, Kebe says his new mantra is: “Do I need this? No I don’t.”

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