Mortgage regret: Survey shows Canadians are stressed about their current mortgage
According to a new survey, a third of Canadian homeowners polled said they regret their current mortgage situation.
That's according to a survey taken by the Real Estate and Mortgage Institute of Canada (REMIC) which completed an online survey of 1,000 random Canadian homeowners.
Some of its key findings show many homeowners are experiencing a form of "mortgage malaise" said REMIC CEO and president Joe White.
‘Mortgage malaise’
- 34.1% of Canadians say ‘they regret the mortgage that they are currently in.’
- 21.80% say ‘interest rate hikes have made it unaffordable.’
- 12.30% regret being locked in at a 'bad rate.’
Yet only 30.21% of Canadians say they would have purchased a less expensive property if they knew mortgage rates would go up.
"It's one thing to look at payments that are increasing by X percent, and it's another thing to look at individuals who are stressed out about this and we're seeing cracks in the family unit because of these financial stressors," said White.
This is a stressful time for homeowners like Maggie White, a new homeowner who despite working a full-time job in the aerospace sector, has had to take on a second job as a cashier to afford her mortgage payments.
"It just started increasing and increasing and by the time June came around of this year our payments were more so 2,300 a month," said Maggie.
With financial reports showing inflation rising still, some speculate that interest rates could climb again, putting even more financial pressure on families which is leading to some tough decisions.
"I think people are stressed," said Clinton Wilkins, a mortgage broker in Halifax. "Clients are assessing whether they can stay in their home or does it financially make sense to list their home?"
The Bank of Canada hasn't signalled whether it will raise its key interest rate beyond the current five per cent figure, either way for Homeowners like Maggie and her husband, are already feeling the financial pressure and having to make some tough decisions.
"It's been very stressful, financially," said Maggie. The 25-year-old first-time homebuyer and her husband couldn't handle the constant increases to their variable rate and eventually locked into a long-term fixed rate this summer.
But at this rate, their mortgage payments are still overwhelming.
"I'm hoping I won't have to continue doing two jobs but our mortgage rate is still high as opposed to what it was last year," she said. "So I may have to continue this into the new year."
According to the survey, nearly 60 per cent of homeowners polled said they didn't know their exact monthly mortgage payments ‘without looking them up.’
While more than half of Canadians couldn't say what the current key interest rate was in Canada, which speaks to a need for more education around home ownership says White.
“Our survey is clearly showing that Canadian homebuyers need to educate themselves more on the basics of taking on a mortgage and its lasting financial impact," said White. "This is exactly the kind of information that they would be getting from a licensed mortgage broker and a big part of the advantage of using a broker to secure a mortgage."
In Halifax there's such a housing shortage that if homeowners wanted to downsize their home, to find something more affordable, there are not a lot of options on the market, said Wilkins.
"I think it's still very hot," said Wilkins, referring to the housing market. "We're still in a seller's market here in Halifax and that is certainly not the case across the country.
I can tell you that there are reports out of Ontario in Alberta and B.C. that their housing markets are down 30 to 50 percent in terms of activity."
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