Variable rate mortgage holders have felt the full force of the latest interest rate hike cycle, with a staggering 45% of variable rate holders now saying they'll be forced to sell in just under nine months.
This is according to a new poll from Yahoo Canada and Maru Public Opinion, the results of which were released on Thursday. And it's not just variable-rate mortgage holders who are at risk -- the poll revealed that 45% of those with a line of credit on their home say they would have to sell or vacate the property in the next 8.3 months.
Owners with fixed-rate mortgages appear to feel more confident about their financial situation, but only marginally, with 35% saying they'd be forced to sell or vacate in the next 10.4 months, and 66% saying they can ride the rate hike out for as long as it takes.
Overall, 35% of Canadian homeowners say they won't be able to handle the current Bank of Canada (BoC) policy rate for more than 10 months before they'll have to sell.
These finding come after the BoC implemented its eighth consecutive interest rate hike last month, bringing its policy lending rate to 4.5% -- a big change from the historically low 0.25% that was introduced at the beginning of the pandemic and maintained until March 2022.
Although the BoC indicated during its most recent hike that they plan to pause the rate at its current level, there was no indication of when a reduction could be on the table -- something that would provide extremely welcome relief to homeowners.
Of the homeowners surveyed, just 29% said they haven't experienced much of an impact from rising rates. Among variable rate holders, 19% said they had to make drastic financial adjustments and lifestyle changes, 29% said they are feeling very serious pressure but are doing what they can to get by, and 38% said they have felt anxiety, but it's manageable.
For fixed rate holders, the numbers are slightly different, with 11% making drastic financial changes, 25% feeling very serious pressure, and 44% having manageable anxiety.
