More Canadians struggling with monthly mortgage payment: Angus Reid survey

A recent survey conducted by the Angus Reid Institute reveals a concerning trend among Canadian homeowners as an increasing number are grappling with the financial burden of their monthly mortgage payments. The study also underscores heightened apprehension about the possibility of higher payments upon mortgage renewal. These findings highlight the economic uncertainties facing Canadian households.

The survey data, released on Monday, sheds light on the financial challenges facing many Canadian homeowners. Approximately 15 percent of mortgage borrowers describe the financial aspect of their mortgage as "very difficult," marking a significant increase from 11 percent in June and eight percent in March. The rising percentage of individuals struggling with their mortgage payments raises concerns about the overall economic well-being of Canadians.

While the Bank of Canada is expected to maintain its key interest rate at five percent in its upcoming announcement, a staggering 79 percent of respondents expressed concerns or anxiety about the prospect of facing higher mortgage payments when it's time for renewal. This pervasive sense of unease reflects the ever-present economic uncertainty that homeowners are grappling with.

Interestingly, the survey found that those with variable-rate mortgages were less likely to find their monthly payments easy to manage at present. However, respondents with variable-rate loans expressed less apprehension about the uncertainties of their next mortgage renewal compared to those with fixed-rate mortgages. This indicates that there may be varying levels of risk perception among different types of mortgage holders.

James Laird, co-CEO of Ratehub.ca and president of CanWise Financial, weighed in on the survey findings, noting that the prevailing pessimism should come as no surprise. He emphasized that even if the Bank of Canada maintains the current interest rate, it is unlikely to alleviate the concerns of most borrowers. Laird explained that a small interest rate increase, such as an additional 25 basis points, would not be a significant change in the context of household budgets. What is more telling, he suggested, is the central bank's commentary on its future plans and strategies.

The Bank of Canada's decision to hold the key interest rate steady last month, while not unexpected, left the door open for future rate hikes due to ongoing concerns about underlying price pressures. The September consumer price index report provided some relief by showing a slowdown in the annual inflation rate, which dropped to 3.8 percent.

In addition to mortgage-related concerns, the Angus Reid data also indicates that approximately half of respondents feel they are in a worse financial position than they were a year ago, while 35 percent anticipate an even more challenging financial situation in the year ahead. This suggests that economic uncertainties are not limited to mortgage payments but extend to broader aspects of household finances.

The online survey was conducted from October 9 to 13 and included a representative randomized sample of 1,878 Canadian adults who are members of the Angus Reid Forum. The poll has a margin of error of +/- 2 percentage points and a confidence level of 95 percent.

Laird noted that while many households are currently "definitely strained," most Canadians are still managing to make their mortgage payments unless they have recently experienced job loss. However, the financial strain has consequences for other important aspects of household budgets, such as savings. As Laird put it, "The first dollar in every household budget goes to that shelter payment, whether it's a rent payment or a mortgage payment. So what's happening is things are being squeezed out of the budget. The payments are being made on time, but there's just less money for other vital financial priorities like RRSPs and RESPs."

In conclusion, the Angus Reid survey paints a worrisome picture of Canadians' increasing struggles with their monthly mortgage payments and growing apprehensions about future mortgage renewals, indicative of the economic challenges many households are facing. While the Bank of Canada's decision on interest rates remains a focal point, it is clear that Canadians are navigating an environment marked by financial uncertainty and constraints.