As interest rates have climbed to a 22-year high over the past year and a half, Canadians have seen their shelter costs soar. As such, survey after survey has shown that Canadians are stressed (to say the least) about their current mortgage and rent dues (not to mention, how they will fare with these costs in the future).
Amid higher monthly mortgage and rent payments, new data from Equifax reveals that 31% of Canadian respondents have had to “seek additional income” in order to make ends meet, while 35% say they’re concerned about job security in light of roaring housing costs.
Based on an online survey of 1,564 Canadians completed between September 15 and 18, 2023, Equifax’s findings also show that 19% of respondents are in a “precarious financial situation” and “feeling the need to move due to affordability issues.” For mortgage holders specifically, 36% say they are concerned about renewing their mortgage at a higher rate than they can afford.
That latter figure packs a bigger punch when you consider that close to a third of mortgages across Canada will be up for renewal over the next 18 months, according to new data from Royal LePage. Royal LePage also notes that 24% of mortgage borrowers concerned about renewals have considered extending their amortization periods, 23% have thought about switching to another lender, and 18% have contemplated extending their next mortgage term. Meanwhile, 32% have considered selling their home in lieu of buying a smaller property (17%), renting instead (8%), or moving in with family or friends (7%).
Circling back to Equifax’s report, 45% of respondents say they are concerned about paying oﬀ debt — including but not limited to mortgage debt — however, only 18% say they have sought professional advice or counselling to manage that debt.
As well, it seems that younger adults (those between the ages of 18 and 34) are “feeling the financial pinch” more so than older generations, with 36% saying that they’ve missed a bill payment this year (compared to 23% of all respondents), and 52% saying they have anxiety about their personal debt levels (compared to 39% of all respondents).
This is not the first indication that young Canadians these days are seeing their budgets stretched especially thin. Recent data from Statistics Canada shows that the under-35 cohort is shedding more mortgage debt than all household types combined.
More specifically, StatCan reports that the average mortgage debt for households in that age group has plunged 2.8% between the second quarters of 2022 and 2023. Just prior, between the second quarters of 2020 and 2022, that same metric was up 22.4%. StatCan speculates that such a drastic reduction in mortgage balances could mean that young Canadians are “moving into more affordable accommodations” or “turning away” from the housing market altogether amid financial strain.