Higher mortgage rates are making some Canadians question value of home ownership
Global News
Canadians are feeling more mortgage stress amid higher interest rates, according to a new CMHC survey, and it's affecting some attitudes about the overall housing market.
Higher mortgage rates are souring many Canadian homeowners’ views on the housing market overall, a new survey suggests.
The Canada Mortgage and Housing Corp. (CMHC) released the results of the survey on Wednesday that polled some 4,000 mortgage holders in January about how their attitudes have changed amid the rapid rise in interest rates over the past year.
The Bank of Canada raised its benchmark interest rate to 4.5 per cent at the end of the month, where it’s remained after two consecutive pauses since. That’s up from 0.25 per cent in 2022, which means Canadians are paying more on their variable-rate mortgages immediately and on fixed-rate products when they renew their terms.
Almost three-quarters of all mortgage holders (74 per cent) said they have already been affected or expect to be impacted by the higher rates, according to CMHC.
Of those feeling the pinch of higher rates, almost half (49 per cent) said they were struggling to pay down their debt.
The CMHC survey arrives as the Bank of Canada says it’s keeping its eye on the housing market, but isn’t yet seeing “alarm bells” that high interest rates will lead to a wave of Canadians defaulting on their mortgages.
Tiff Macklem, governor at the central bank, said at an event in Toronto last week that while mortgage delinquencies have been ticking back up, they are normalizing to pre-pandemic levels.
“We are acutely aware that some Canadians have been very squeezed by the interest rate increases,” Macklem told the crowd Thursday.