Four-in-ten Canadian homeowners have either made extra mortgage payments, or increased the amount of their mortgage payment in the past year, finds a survey by Manulife Bank of Canada. Homeowners with mortgage debt paid down an average of $6,300 in the past year, with 18% making an extra lump-sum payment, 17% increasing their regular payments, and 5% doing both.
Further, 56% reduced their debt in the past year, up from 51% a year ago, while 80% say that being or becoming debt-free was among their top financial priorities.
“These results are encouraging,” said Rick Lunny, president and CEO, Manulife Bank of Canada. “Effective debt management is absolutely central to long-term financial health, and clearly many Canadians are taking advantage of the low-rate environment to reduce their debt.”
Additional findings include:
- 79% are willing to cut back on some of their discretionary spending if it means they could be debt-free sooner;
- homeowners who have a mortgage report an average of $190,000 in mortgage debt, ranging from an average of $242,300 in Alberta to $127,300 in Atlantic Canada;
- one in six say they’d struggle to make regular mortgage payments within one month if they lost their job;
- 70% would direct any extra money towards retirement savings; and
- more than one-third of homeowners would encounter financial difficulty if their mortgage payment increased by 10%.