Financial pessimism has become the norm for a significant number of Canadians, new study suggests
More Canadians are now struggling with their mortgage amortizations amid lingering fears of potentially higher payments come renewal time, according to a new study by the Angus Reid Institute.
The poll found that in recent months, approximately 15% of Canadians found servicing their mortgage payments “very difficult”. This was a rate twice as high as that seen back in March, Angus Reid said.
“The Bank of Canada has hiked rates only twice since March, but many are still feeling the shock of the cost of borrowing jumping significantly since the beginning of 2022, when the BoC’s policy rate was 0.25%,” the study noted.
A significant share of mortgage holders said that they are either worried (40%) or very worried (39%) that they will have to contend with higher payments once they need to renew with their banks. Fully 57% admitted that they are “very worried” that their monthly payments will sharply rise as a result.
Concerns arise about upcoming mortgage renewals, with significant fixed-rate terms ending. Some borrowers may face challenges, with up to 15% of Desjardins borrowers under stress. https://t.co/TnmRj1QbdL#mortgagenews #mortgageindustry #mortgagerepayment #interestrates
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 28, 2023
Affordability reaches crisis levels for many Canadians
Amid the mounting costs of housing, the question of affordability has become a genuine crisis for an ever-increasing number of Canadians, Angus Reid said.
Despite a historic number of wildfires this summer, climate change is now less of a top priority for Canadians (23%) compared to housing affordability (32%).
Financial pessimism has become the norm, with 49% of respondents saying that they are in a worse financial position now compared to the previous year. Another 35% are expecting to be in a worse position a year from now.
