Canadians struggling to pay their mortgage has doubled since March

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Halloween is just around the corner, but for many Canadians with a mortgage, the Bank of Canada’s (BoC) upcoming interest rate announcement is what’s really giving them the heebie-jeebies.

The Angus Reid Institute released a report on Monday, revealing that the number of Canadians struggling to pay their monthly mortgage payment has grown in recent months — and many fear another interest rate hike is on the horizon.

“While the expectation from economists reading the macroeconomic tea leaves is that the BoC will hold rates steady this week, that does little to quell the concerns many mortgage holders are facing,” reads the report.

According to Angus Reid, one in six (15%) Canadians say they find the financial aspect of their mortgage “very difficult,” a figure that has doubled from data seen in March.

Angus Reid Institute

Since March, the BoC has hiked interest rates twice. Canadians are certainly feeling the pinch since the cost of borrowing jumped significantly at the beginning of 2022 when the BoC’s policy rate was 0.25%. Since then, it has risen to 5%.

With interest rates as they are, four out of five homeowners with a mortgage say they are either worried (40%) or very worried (39%) that they will face higher payments when it comes time to renew with their bank.

Most homeowners facing renewal in the next 12 months are “very worried” (57%) that their monthly payments will rise significantly.

The Angus Reid report adds that Canadians’ struggles to pay their mortgage are compounded by other key issues like the rising cost of living, healthcare, and housing affordability in general.

Angus Reid Institute

“Inflation has decelerated, especially on important categories such as groceries, though that deceleration still meant Canadians were paying 5.8% more for groceries in September than they were in the same month of 2022,” reads the report. “For many Canadians, relief from the rising cost of living can’t come soon enough.”

The report found that, overall, Canadians are feeling down about their financial situations and prospects.

Half (49%) say they are in a worse financial position than last year, while 35% expect to be in a worse position a year from now.

Angus Reid Institute

Both figures tie records seen in more than 13 years of tracking data from the Angus Reid Institute.

Angus Reid Institute

The Bank of Canada’s interest rate announcement is set for Wednesday, October 25, and it’s expected the central bank will hold the rate at 5%.

How are interest rates affecting your ability to pay for your mortgage? Let us know in the comments, or send us your story at [email protected].

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