Canadians expect to pay approximately $60,000 in interest over the life of their mortgages, finds a BMO poll.
Nationwide, the average amount people predict they’ll pay is $57,938. The figure is much higher for residents in B.C. ($95,891), while those in Atlantic Canada expect to pay the least ($35,454).
The poll also finds most Canadians (60%) predict an increase in interest rates over the next five years, with 48% of that total calling for a smaller increase and 12% expecting a large increase.
But most Canadian mortgage holders (67%) currently have fixed-rate mortgages, which will help shelter them against potential rate upswings.
Sal Guatieri, senior economist of BMO Capital Markets, says it isn’t surprising that British Columbians are paying the most mortgage interest, as home prices in that province are the highest in the country—the average was $623,000 in April, compared to $437,000 nationwide, and $456,000 in Ontario.
When will clients be mortgage-free?
Despite the interest they have to pay, many homeowners say they’ll be mortgage-free by age 59—that’s up from 58 years old, as stated in the last two years.
Still, 31% say they’ll likely still be making mortgage payments past age 60 (see provincial breakdown of results below).
If clients are looking for budgeting help, tell them to weigh the pros and cons of fixed versus variable mortgages. Also, help stress-test their current mortgages. To perform a stress test, help people figure out what their possible future payments could be based on different levels of rising interest rates.
|AVERAGE AGE EXPECTED TO BE ‘MORTGAGE FREE’ BY REGION|