One in four Canadians say that if interest rates continue to rise, they’d struggle to pay their mortgages, finds an HSBC Bank Canada survey. Still, 37% of prospective homebuyers in Canada are willing to stretch themselves financially to afford a better home.
Here are additional findings:
- Mortgage holders in Canada are amongst the least likely across the globe to say they’ve shopped around for a better mortgage rate (Canada: 50%; global average: 61%). The research notes that the most active deal-hunters are in France (79%), Malaysia (72%) and China (69%).
- While 24% of prospective homebuyers in Canada say they wouldn’t be able to afford a two-point rate rise, they are the least likely to feel this way (global average: 32%). Prospective homebuyers who are most likely to struggle with a such an increase are in Malaysia (43%), Taiwan (40%) and France (37%).
- 78% of current mortgage holders in Canada report they’ve never experienced a rate rise on their current mortgage or home loan. Those most likely to have never seen increases are in France (97%), the U.S. (87%) and the U.K. (84%).
HSBC offers the following tips for buyers.
- Help clients use a mortgage calculator to get a clear perspective on their specific situations. Enter a mortgage rate that is two points higher than present to see how they’ll fare.
- Ensure clients get pre-approved for mortgages. This will empower them to negotiate from a position of strength, knowing that financing will not be an issue when an offer is accepted.
- Help clients shop for the best rate, offered by a secure institution.
About the survey: It was conducted in September and October 2017, and represents the views of 10,005 people in 10 countries: Australia, Canada, China, France, Malaysia, Mexico, Singapore, Taiwan, the U.K. and the U.S. The findings are based on a survey of current and prospective homeowners aged 21 or older.