Even before the Bank of Canada ratchetted up its overnight rate by .25%, taking it to a two-decade high of 4.75%, a poll from Angus Reid Institute (ARI) found the reality of higher rates has added to mounting financial challenges for Canadians..ARI says 45% of mortgage holders and 54% of renters reported they were finding their respective monthly housing payments “tough” or “very difficult to manage.”. PollPool .“Interest rates have risen significantly since the beginning of 2022 as the Bank of Canada has tried to cool rising inflation,” says ARI. “This has affected both homeowners with mortgages as the cost of borrowing has risen and renters, whose landlords are affected by the interest rate increases.”.Slightly more than a year after the bank started raising its rate, ARI found “both renters and owners are more likely to report difficulties paying their rent or mortgage.” .Among respondents with mortgages, the share reporting some degree of difficulty affording their monthly mortgage payments increased from 33% in June 2022 to 45% in June 2023..For renters, those reporting some degree of difficulty (tough and difficult) increased almost negligibly year-over-year, from 53% to 54%..ARI has established an economic stress index that analyzes variables relating to household costs, debt, and stress, as well as financial self-reflection, optimism, and pessimism among Canadians, and gauges whether respondents are struggling, uncomfortable, comfortable, or thriving..The index found 58% of mortgage holders say they are struggling or uncomfortable, compared to 62% of renters who say the same. .Not surprisingly, 67% of homeowners without a mortgage say they are comfortable or thriving.. PollPoll .When it comes to debt, 81% of homeowners who are making mortgage payments and 71% of renters reported facing some degree of stress surrounding their debt. Renters and owners with mortgages are three times as likely as owners who have paid off their homes to report finding their debt levels to be a major source of stress.. PollPoll .“Overall, 46% of respondents said they are in worse shape financially than they were last June, while 39% are holding steady, while 14% said they are trending positively,” says ARI. “These numbers have been fairly consistent since the beginning of 2022, when concerning inflation trends first caused the bank to act.”
