Some Canadians would struggle to pay mortgages if rates rise

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.

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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.

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