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Most New Homebuyers 'Very Worried' Next Term Will Bring Much Higher Monthly Payments
May 17, 2023 | Posted by: Angela Robinson
The Bank of Canada has held its key rate steady in April, however; the decision to raise interest rates eight times since the beginning of 2022, along with the subsequent increase in mortgage rates, has exacerbated the housing affordability crisis, leading to anxiety among those already in the housing market.
A study conducted by the Angus Reid Institute reveals that 30% of respondents are experiencing mortgage difficulties, rising to 51% among those with variable rate mortgages. Regardless of the type of mortgage held, approximately 77% of Canadian homeowners express concerns about the increased costs associated with mortgage renewals.
Half of those with variable rate mortgages have taken money out of savings accounts to meet their financial needs. Moreover, 18% of homeowners state that they would lose money if they were forced to sell their homes, with this proportion rising to 24% among those with mortgage terms exceeding 25 years.
Housing affordability has been a significant issue across the country, with 27% of homeowners describing their financial situation as poor or terrible. Individuals with variable rate mortgages are more likely to face challenges, as the lending rate has increased from close to 1% to over 5% in the past 18 months.
Interest rates have risen significantly in the past year, affecting both variable and fixed rate mortgages. Despite a correction in housing prices, with a 15% drop from the peak in February 2022, prices have not fallen below pre-pandemic levels, leading 75% of mortgage holders to believe they would make money if they were forced to sell their homes today.
Contact us today to discuss solutions should you find yourself stressed about managing your mortgage. Call 780 701 3888 or email marc@albertmortgagepros.ca
Full article: https://angusreid.org/canada-mortgage-housing-variable-fixed-interest-rate-bank-of-canada/
