A new poll has found more and more mortgage holders in Canada are struggling to make ends meet.
The poll, from the Angus Reid Institute, found one-in-six (15 per cent) of those with a mortgage say they find the financial aspect “very difficult”, which is double the number of people that were polled in March.
The Bank of Canada is expected to make another rate hike announcement this week, with economists predicting that it will likely hold its key interest rate at five per cent.
However, with the current rates, four-in-five homeowners with a mortgage said they are either worried (40 per cent), or very worried (39 per cent) they will face higher payments upon renewal of their mortgage.
Those facing renewal in the next 12 months are very worried their monthly payments will rise significantly.
Dave Korzinski, research director at the Angus Reid Institute, told Global News that one of the takeaways from the poll that he noted was the distinction between two groups of people – one who is currently struggling with their mortgage and the other who is anticipating the struggle.
“It’s kind of this collating of factors where so many people are impacted by this financial worry because it’s this uncertain situation where we’ve got interest rates going from .25 20 months ago to five per cent and these installments kind of pushing it upwards,” Korzinski said.
“They’re having a tough time and they’re kind of expecting things to get more difficult, rather than easier, and that’s the challenges our governments are facing right now.”
In late August, B.C. Premier David Eby sent a letter to the Bank of Canada asking for the regulator to avoid an interest rate hike in September.
In writing directly to Governor Tiff Macklen, Eby said another rate hike would hurt mortgage holders with expired or soon-to-expire policies.
“People in B.C. are already hurting. In your role as Governor, I urge you to consider the full human impact of rate increases and not further increase rates at this time,” Eby wrote.
The Bank of Canada did not end up raising prime rates in September, keeping it at 7.2 per cent. However, more interest rate hikes could be on the horizon.
According to the poll, almost half of Canadians polls said they are in a worse financial position than they were last year, while 35 per cent expect to be in a worse position a year from now.
Sherlock Yam, mortgage broker with Dominion Lending Centres Clear Trust Mortgages, told Global News the rates are getting “pretty high” with clients having to make decisions about what they can afford.
“I have seen more discounting on the bank’s side though,” he said. “The discounts are bigger than in the past with the rates being higher so I do see them working on behalf of clients that way.”
The Bank of Canada is set to make an announcement about its next interest rate hike on Oct. 25.
The Angus Reid Institute conducted an online survey from Oct. 9 to 13, 2023 among a representative randomized sample of 1,878 Canadian adults who are members of Angus Reid Forum. For comparison purposes only, a probability sample of this size would carry a margin of error of +/- 2 percentage points, 19 times out of 20. Discrepancies in or between totals are due to rounding. The survey was self-commissioned and paid for by ARI.