In a landscape marked by recent interest rate hikes, Canadian homeowners are grappling with unforeseen and substantial increases in their monthly mortgage payments, leading to a widespread sense of mortgage malaise, according to a recent survey conducted by The Real Estate and Mortgage Institute of Canada (REMIC).
The survey, which gathered insights from 1000 random Canadians online, sheds light on homeowners’ sentiments about their current mortgages, the impact of interest rate fluctuations, and the varying levels of financial awareness among this group.
Mortgage regret grips over a third of respondents
More than a third of Canadian homeowners (34.1 per cent) find themselves riddled with mortgage regret, expressing dissatisfaction with their current mortgage arrangements. Factors contributing to this sentiment include concerns about being locked into unfavourable rates (12.3 per cent) and the unaffordability brought about by interest rate hikes (21.8 per cent).
Interestingly, only 30.21 per cent of respondents claimed they would have opted for a less expensive property if they had foreseen the rise in mortgage rates.
Interest rate hikes fuel affordability concerns
The survey underscores the impact of interest rate hikes on affordability, with over a fifth of respondents (21.8 per cent) reporting that these increases have made their mortgages unaffordable. This resonates with the broader economic trend in Canada, where consistently rising interest rates have put pressure on homeowners’ financial stability.
The knowledge gap: Canadians in the dark about interest rates
Perhaps more concerning is the revelation that a substantial portion of Canadian homeowners lack basic knowledge about interest rates. A staggering 59 per cent of respondents either do not know or are unsure about the current interest rate in Canada, while 68.4 per cent of respondents are unclear about their mortgage payments should the Canadian interest rate reach the current 5.0 per cent.
Canadians grapple with long-term repayment prospects
The survey delves into Canadians’ expectations about the duration of their mortgage repayments. A substantial 45.2 per cent of respondents anticipate carrying their mortgages until the age of 60, while 58.2 per cent of respondents also confess to lacking an accurate understanding of their monthly mortgage payments without referencing external sources.