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Homeowners buckling under high interest rates as mortgage rates balloon
June 21, 2023 | Posted by: Angela Robinson
Bank of Canada's interest rate increases have resulted in financial hardship for homeowners, particularly those with variable mortgages, who are struggling to manage their payments. Homeowners are not only facing immediate challenges but also harboring concerns about future loan renewals and the potential for significant increases in mortgage payments. This widespread issue of housing affordability is no longer confined to expensive urban real estate markets like Vancouver and Toronto; it has become a nationwide concern affecting both current homeowners and aspiring buyers.
As a consequence of rising interest rates, many borrowers have been forced to cut back on discretionary spending and delay major purchases, such as appliances or vehicles. The impact is more pronounced for individuals with variable-rate mortgages, as they are more likely to perceive their financial condition as 'poor or terrible' and have had to dip into savings to access additional funds compared to those with fixed mortgages.
Bank of Canada governor Tiff Macklem has hinted that interest rates may need to remain elevated for an extended period. However, economists foresee the possibility of rate cuts in the future, potentially starting next year, which would bring much-needed relief to individuals with variable-rate mortgages and those preparing to renew their fixed-rate mortgages.
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Full Article:https://ca.finance.yahoo.com/news/posthaste-homeowners-buckling-under-high-120010946.html?soc_src=social-sh&soc_trk=ma
