The survey, conducted between April 14 and 20, also found that 18 percent of homeowners surveyed are already at a stage where they can not afford their homes. More than one in five Canadians expect the rate hike to have a “significant negative impact” on their overall mortgage, debt and financial situation, according to the survey. The Bank of Canada remains on track to raise interest rates as it tries to tame inflation, which is now at a 31-year high of 6.8%. On June 1, the central bank raised its key interest rate by half a percentage point to 1.5%. Low interest rates during the pandemic fueled a boom in real estate demand that pushed housing prices soaring. “Some Canadians have decided to take out their mortgages based on what they could approve and may not have received any financial advice to say, ‘I know I can apply for a mortgage at this particular level, but what can it really do? I can afford it;” said Lysa Fitzgerald, vice president of sales at Manulife. CLOCKS Warning for homeowners:
Bank of Canada warns homeowners against rising mortgage rates
Personal finance columnist Rubina Ahmed-Haq says the Bank of Canada is ensuring that people are prepared for higher mortgage payments in the coming years. But Fitzgerald says it is important to remember that the survey is an indication of how Canadians feel about their financial situation, not a reflection of their real financial risk. “There is a lot of speculation going on out there,” he said. “I’ll just encourage Canadians to find themselves a very good certified financial advisor who is used to dealing with such scenarios.” The Manulife survey also found that two-thirds of Canadians do not see home ownership as accessible to their local community. In addition, nearly half of over-indebted Canadians say debt’s affecting their mental health, and nearly 50 percent of Canadians say it would be difficult to manage sudden expenses.
