More than six out of 10 Canadians admitted to not understanding mortgages
A significant proportion of Canadians have admitted to less than satisfactory knowledge of financial matters, according to the results of a new national survey by Rates.ca.
Fully 94% of the respondents also stated that financial literacy needs to see greater presence and emphasis in school curricula.
“In 2019, it’s troubling that Canadians continue to have a low comprehension of how money works,” Rates.ca vice president Sara Kesheh said.
“Financial literacy is the cornerstone to ensuring your money works hard for you. Without that knowledge, saving, debt management and even achieving a desired lifestyle may all be negatively impacted.”
Roughly 44% admitted that they have a poor understanding of credit cards. While 92% of Canadians use their credit cards every month, with 47% using cards for 10 or more purchases monthly, only around 60% know their credit scores.
The proportion was even more alarming when it comes to mortgages, with 62% admitting to not understanding these financial products. Only around half of the respondents (57% of men and 44% of women) have knowledge about the different kinds of mortgages available.
A massive 90% admitted to not knowing that mortgage interest on fixed-rate products is charged semi-annually, while 61% did not know that a minimum down payment of 20% on a mortgage is required to avoid paying government insurance.
