A total of 48% of Canadians could sustain a 15% increase in housing costs for six months or more before having to make drastic changes such as moving or selling their homes, according to a poll conducted by Leger on behalf of EveryRate.ca.By focusing on a 15% increase, Leger highlighted stark disparities in financial preparedness and the urgent need for proactive planning. “Now, more than ever, Canadians need to prepare for financial uncertainty,” said Canadian financial expert Andy Hill in a blog post.“It’s not just about cutting costs but taking proactive steps — like getting multiple mortgage quotes and exploring all your options — to safeguard your finances.”Leger found 34% of Canadians could sustain a 15% rise in housing costs for one year or more. However, it said 14% could last for six to 12 months. While 48% would be able to last for at least six months, 21% would immediately move or sell. Another 15% could go for one to three months, and 15% could afford it for three to five months. Leger went on to say 62% of Canadians aged 18 to 24 years old could sustain less than six months of higher housing costs, with similar results for those aged 25 to 34 (63%). Meanwhile, it said two-thirds of low-income households could not sustain a 15% cost increase for more than six months. Sixty-three percent of renters said they could not manage a 15% increase for six months compared to 44% of homeowners. Three-fifths of families with children admitted they were unable to manage increased costs compared to 48% without them. While a 15% increase might not sound substantial, EveryRate.ca said the numbers tell a different story. For many Canadians, it said paying a few hundred extra dollars each month could mean they go without some essentials or lead to them reconfiguring their living situations.This is not the first time people have seen how closely tied housing costs are to financial stability. A similar survey found two-thirds of Canadian households reported they cannot afford housing costs more than $1,749 per month. For an average Canadian homeowner with a $2,000 monthly mortgage, a 15% increase would add $300, bringing the total to $2,300. Once rising property taxes are added on, the financial burden grows larger. With the average rent for a two-bedroom apartment in Canada at $1,800, a 15% increase would add $270, raising the total to $2,070. For renters allocating a significant share of their income to housing, this could mean reevaluating their living arrangements or facing housing insecurity.While a 15% rise in housing costs sounds excessive, EveryRate.ca said it is not as far-fetched as it seems for various reasons. The Canada Mortgage and Housing Corporation said more than 1.2 million fixed rate mortgages will renew in 2025, and many of them were at rates below 2%. This means renewing at today’s rates could lead to $200 to $300 monthly payment increases for homeowners. While variable rates are beginning to decline, they remain higher than they were four years ago. Fixed rates are holding steady or trending upward, adding challenges for renewals or new mortgages.Municipalities across Canada are raising property taxes to address budget deficits. For example, Toronto’s 9.5% property tax increase for 2024 adds $380 annually to a $4,000 property tax bill.EveryRate.ca said these pressures make financial preparedness essential as households brace for higher costs in the coming year.It said navigating financial uncertainty does not have to lead to financial instability.To be prepared for higher housing costs, it said people should compare multiple quotes, which could save them thousands of dollars throughout their mortgages. It noted platforms such as it make it simple to explore competitive rates. If people are renewing mortgages, it said they should consider locking in rates early or extending their amortization periods to reduce monthly payments. With the right resources and planning, EveryRate.ca said Canadians can face these challenges with ease. As 2025 approaches, it said taking steps now could ease the financial strain and build confidence for the future.The Bank of Canada (BOC) reduced its target for the overnight rate to 3.75% in October, with the bank rate at 4% and the deposit rate at 3.75%. .Bank of Canada delivers jumbo .5% rate cut.The BOC acknowledged inflation declined significantly from 2.7% in June to 1.6% in September. “Inflation in shelter costs remains elevated but has begun to ease,” said the BOC. The poll was conducted online using EveryRate.ca's omnibus platform with 1,526 Canadian adults between November 15 and 18. It had a margin of error of +/- 2.5 percentage points, 19 times out of 20.
