Skip to main content

Mortgages & Rates Most homeowners would have mortgage trouble if payments rose by more than 10 per cent: poll

Photografeus/Getty Images/iStockphoto

Nearly three-quarters of Canadian homeowners say they would have difficulty paying their mortgage if their payments were to increase by more than 10 per cent, a new survey by Manulife Bank says.

Thirty-eight per cent of those polled say their mortgage bills could rise between 1 per cent to 5 per cent before they would have financial difficulty; 20 per cent say they could sustain an increase in payments between 6 per cent and 10 per cent before having trouble; and 14 per cent say any hike would be a problem.

Twenty-two per cent said they could handle a payment increase of between 11 per cent to 30 per cent, while the remaining 7 per cent didn't know or were unsure.

Story continues below advertisement

"What these people don't realize is that we're at record-low interest rates today," said Rick Lunny, president and chief executive of Manulife Bank, adding that a 10-per-cent increase in mortgage payments could be the result of as little as a 1-per-cent interest hike.

"When you put it into that context, they're not really prepared for what is inevitable. Sooner or later, interest rates are going to rise."

The survey found that 45 per cent of millennial homeowners – those between the age of 20 and 35 – would have the most difficulty making their mortgage payment within three months or less if the primary income-earner in their families were to suddenly become unemployed.

Millennials were also the group that on average had the highest amount of outstanding mortgage debt, at $223,000, while gen X-ers (those aged 36 to 52) had an average of $202,000 owing. Baby boomers (53 to 70) had $180,000.

Mr. Lunny said many millennials are unprepared to deal with a financial emergency due to a lack of financial literacy and soaring amounts of debt. That group has seen their mortgage debt rise more than any other generation, according to the survey.

The survey was conducted online in English and French from Feb. 1 to 14. It polled 2,098 homeowners between the ages of 20 and 69 with household incomes of $50,000 or higher.

The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Preet Banerjee calculates how much land transfer taxes or fees could cost a home buyer across Canada
Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter