Younger mortgage holders struggle with payments
Canadians with mortgages are feeling the financial strain, with younger homeowners being hit particularly hard, according to a new Leger survey.
The survey found that roughly six in 10 (68%) Canadians between 18 and 34 years old with a mortgage reported feeling "very" or "somewhat" financially stressed about their mortgage payments. This compared to 62% of all homeowners surveyed who expressed similar anxieties.
The pressure comes after the Bank of Canada implemented a period of rising interest rates to combat inflation. Last week, the Bank of Canada cut its key interest rate for the first time in several years, offering some relief to borrowers.
Opinions are divided on the central bank's approach to interest rates.
The survey found that four in 10 Canadians believe the Bank of Canada should be cautious with further rate cuts, while another third believe the Bank is not lowering rates quickly enough. Interestingly, respondents from wealthier households (earning over $100,000 annually) were more likely to favour a cautious approach by the bank.
The rising interest rates have seemingly pushed many Canadians towards fixed-rate mortgages for stability. The survey indicated that 77% of respondents with mortgages currently have fixed-rate terms.
Of those with fixed-rate mortgages, 43% expect their mortgage to be up for renewal within the next two years. Interestingly, two-thirds of those expecting renewal in the next two years plan to stick with a fixed-rate option, while younger respondents were more likely to consider variable rates.
It's important to note that Leger's survey was conducted online, and online surveys cannot be assigned a traditional margin of error as they don't rely on random sampling of the population. The survey polled 1,528 Canadians between June 7th and June 9th.
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