Another Rate Hike Would Force 35% of Canadian Mortgage Holders to Seriously Change Housing, Employment: WealthRocket Survey
- 35% say their current financial situation will need to change if interest rates increase again.
- 31% of Canadian mortgage holders are putting 40%+ of their gross monthly income toward housing costs — exceeding the CMHC's standard.
- 36% say one partner's monthly income covers only the mortgage, while the other covers remaining housing costs.
TORONTO, Oct. 19, 2023 /CNW/ - A new WealthRocket survey finds that if the Bank of Canada (BoC) raises interest rates again, more than a third of mortgage-holding Canadians will need to change something about their current financial situation — including housing and employment.
Impact of another rate hike on Canadian homeowners
Even one more rate hike from the BoC would see 35% of Canadian mortgage holders needing to make significant life changes, including:
- 17% would need to get an additional job
- 16% would need to extend their amortization
- 9% would have to sell their home
Conversely, 65% say nothing about their situation would need to change.
"Most of us will know somebody who had to sell their home and downsize, or start renting because they couldn't afford it any longer," says David O'Leary, WealthRocket's personal finance expert. "But many people facing this situation will be reluctant to admit it until they have no choice."
Many Canadians spending more on housing than is recommended
The CMHC says homeowners shouldn't spend more than 39% of their monthly gross income on housing. But nearly 1-in-3 (31%) of mortgage-holding Canadians who currently own a house or condo are doing just that.
How Canadians are affording housing
Canadians are relying on various arrangements to meet rising housing costs, including:
- 36% say one partner's income covers the mortgage, while the other's covers remaining costs.
- 27% say one partner's income covers all housing costs, including the mortgage.
Methodology
WealthRocket commissioned an Angus Reid survey in English and French from September 22-25, 2023, among a representative online sample of 1,504 Canadians. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-2.5 percentage points, 19 times out of 20.
About WealthRocket
WealthRocket is a Canadian personal finance website focused on credit cards, banking, investing, budgeting, and more. Our mission is to empower Canadians to get the most out of their money.
SOURCE WealthRocket
Inquiries: Rebecca David, [email protected].
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