Over 60% of renters and younger adults can't afford a 15% housing cost increase
Most Canadians would struggle if their housing costs increased by 15%, according to a new survey conducted by EveryRate.ca.
The survey, which polled 1,526 Canadians in mid-November, found that inflation, rising property taxes, and economic uncertainty are leaving many households financially vulnerable. Many Canadians, particularly younger individuals, renters, and those with lower incomes, are unprepared to handle even modest increases in housing expenses.
Among respondents, younger Canadians aged 18 to 34 were the hardest hit, with over 60% saying they could not sustain higher housing costs for more than six months. Similarly, 66% of low-income households reported they would struggle to manage a 15% increase.
Renters also faced heightened challenges compared to homeowners. While 63% of renters indicated they couldn’t sustain a 15% increase beyond six months, only 44% of homeowners shared the same sentiment. Families with children, as well as respondents from BIPOC communities, were also more likely to report difficulties in coping with increased costs.
“Now, more than ever, Canadians must prepare for financial uncertainty,” said Andy Hill, a mortgage expert and co-founder of EveryRate.ca. “It’s not just about cutting costs but taking proactive steps, like getting multiple mortgage quotes and exploring all your options to safeguard your finances.”
The survey comes as Canada faces a wave of fixed-rate mortgage renewals in 2025. Many homeowners locked in rates below 2% are likely to face a sharp rise when renewing at rates closer to 4% or 4.5%. Hill explained that the increase could translate to monthly payments jumping by $200 to $300 for some households.
“We’re looking at over a million fixed-rate mortgages coming up for renewal in 2025,” he added. “It will be a big adjustment, and planning will make all the difference.”
Adding to the strain, many Canadians are already dealing with the fallout from inflation, as well as rising property taxes, which have climbed by 6% or more in several regions.
Read next: Ontario renters are bearing much of the impact of property taxes
Hill cautioned against the possibility of a second wave of inflation, noting the lingering effects of the last surge.
“It’d be a one-two punch. That one punch hurt a lot of people and left a lasting impression. If we get another one, it’ll be pretty tough,” Hill said.
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