More than half of Canadian mortgage holders could not make it more than three months without their primary income without missing a payment, according to a poll conducted by Leger on behalf of Ratefilter.ca. “For many Canadians, the dream of homeownership is being challenged by a worrying financial reality,” said Ratefilter.ca writer Alan Harder in a Thursday blog post. “New data reveals a landscape where both homeowners and renters are grappling with costs that exceed the Canada Mortgage and Housing Corporation’s (CMHC) recommended limit of spending no more than 30% of pre-tax income on housing.”While 35% of homeowners are mortgage free, Harder said this brings down the expenditure for this group to 34% of pre-tax income. However, that percentage can give a misleading impression of financial well-being. The average Canadian with a mortgage is devoting 41% of his or her income to housing. Alarmingly, 16% of Canadians said they would be in trouble with their mortgage without their main source of income in one month. Over the past one-and-a-half years, the Bank of Canada has raised interest rates to high levels, which has contributed to ongoing financial strain for many Canadians. He said these increases have intensified concerns about housing affordability and financial strain, regardless of what future rate changes might or might not look like. Ratefilter.ca co-founder Andy Hill acknowledged these statistics “corroborate what we’ve been hearing anecdotally.” “Many Canadians feel like they’re at a breaking point due to higher interest rates,” said Hill. “Even if the Bank of Canada pauses the rate hike, these borrowers will still be dealing with rates at a 20-year high.”Harder concluded by saying these figures “underscore the urgency for both policymakers and individuals to address the rising costs of housing in Canada.”“While the statistics offer a broad view, the individual stories highlight an unsettling financial instability lurking beneath the surface,” he said. The Bank of Canada (BOC) said on September 6 it would hold interest rates flat, at least for now. READ MORE: Bank of Canada pauses on interest rate hikes, for nowThe BOC held its target for the overnight rate at 5%, the bank rate at 5.25%, and the deposit rate at 5%. It said it is continuing its policy of quantitative tightening or limiting the money supply.Although inflation remains outside its 2% target, weaker economic growth and slower housing starts prompted its decision to hold, but it is keeping the door open to further hikes in October and December.The next BOC rate announcement is on Wednesday.The poll was conducted online among a representative sample of 1,587 Canadian adults using Leger’s panel LEO from October 13 to 16. It has a margin of error of +/- 2.5 percentage points, 19 times out of 20.
