Nearly 1 in 4 homeowners say they should sell their home if interest rates rise further, according to the survey

Nearly one in four homeowners says they will have to sell their home if interest rates rise further, according to a new Manulife Bank of Canada debt survey.

The survey, conducted between April 14 and 20, also found that 18 percent of homeowners surveyed are already at a stage where they cannot afford their home.

According to the survey, more than one in five Canadians expects rising interest rates to have a “significant negative impact” on their mortgage, debt and overall financial situation.

The Bank of Canada is on a rate hike as it tries to control 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 percent.

Low interest rates during the pandemic led to an increase in real estate demand that caused house prices to skyrocket.

“Some Canadians made decisions to withdraw their mortgages based on what could be approved and may not have received any financial advice to say, well,‘ I know I can get a mortgage approved at this particular level, but What can I actually afford? ‘”said Lysa Fitzgerald, Manulife’s vice president of sales.

TARGET | Notice to owners:

The Bank of Canada warns homeowners of rising mortgage rates

Personal finance columnist Rubina Ahmed-Haq says the Bank of Canada is making sure people are prepared for higher mortgage payments in the coming years.

But Fitzgerald says it’s important to remember that the survey is an indication of how Canadians feel about their financial situation rather than a reflection of their actual financial risk.

“There’s a lot of speculation out there,” he said. “It would only encourage Canadians to find a good certified financial advisor who is used to dealing with such scenarios.”

The Manulife survey also found that two-thirds of Canadians do not consider home ownership affordable to their local community.

In addition, about half of Canadians in debt say debt is affecting their mental health, and nearly 50% of Canadians say it would be difficult for them to manage their surprise expenses.

Leave a Comment

Your email address will not be published. Required fields are marked *