Mortgage Anxiety vs Ownership Confidence

Mortgage Professionals Canada released the results of its survey on June 11, 2020. Semi-Annual Report of the Housing Market. This survey highlights a growing anxiety among mortgage customers, especially in regards to the financial implications of renewing their mortgages at higher interest rates.

Canadians are becoming more anxious about their finances

According to the survey, based on responses from more than 2,00 Canadians, financial anxiety has increased among homeowners. Notably 76% of those who are due to renew their mortgages within the next twelve months expressed anxiety about it. This is up from 66% in the previous year. Furthermore, 70% of Canadians report feeling anxious about their family’s financial outlook over the coming months, a jump from 53% last year.

Mortgage Management and Comfort

Regarding Canadians’ comfort levels with their mortgages, 55% feel prepared to handle an increase in mortgage rates, a slight decrease from last year’s 60%. 33% regret their mortgage size, up from 26% in 2020. 43% of those renewing their mortgages soon wish they had taken out a smaller loan. 23% of respondents believe that even a small rate increase will affect their ability to pay, and 9% already struggle with their payments.

Maintaining Positivity towards Real Estate

Canadians still have a positive attitude towards real estate, despite financial pressures.

80% of respondents consider real estate to be a good long-term financial investment, an increase of seven points from last year. And 77% think a mortgage is a good idea. “good debt,”From 68% in 2023.

52% are optimistic about Canada’s economic prospects in the next year, an increase from 44%.

This is consistent with other surveys, including the Canada Mortgage and Housing Corporation 2024 Mortgage Customer SurveyThen, you can. RBC OneThe exact percentages found varied. 

Non-owners, however, are less optimistic. 51% of non-owners now believe that they will never purchase a home. This is a significant increase from 18% just two years ago. Only 16% plan to buy a house in the next 12 months, down significantly from 23% last time.

Brokerage is on the Rise

As Canadians struggle to navigate financial challenges, they are increasingly turning towards mortgage brokers. 34% of recent homebuyers have used a mortgage agent, an increase of four points over last year. This trend is more pronounced for first-time homebuyers (46%), as well as those who have purchased within the last two years (45%). More respondents (62%) are somewhat or very inclined to use a broker for mortgages in the future.

Broker customers are also highly satisfied with their brokers, who rate them highly for their reliability (37%), ease of doing business (38%), and expertise regarding mortgage products and interest rates (37%).

Renewal Negotiations Decline

It is interesting to note that while Canadians increasingly turn to mortgage brokers for an alternative, they also choose to not negotiate the mortgage rate at renewal. Only 8% of Canadians report that they have negotiated their rate significantly. This is down from 16% back in 2021. In contrast, 44% of respondents accepted the initial interest rate offered by their lender. This is up from 37% in 2012.

There seems to be a lack awareness of broker compensation. This is usually paid by lenders. 27% of those who were concerned about using a broker believed they would be required to pay directly for these services. 

Mortgage Fraud: A Concern

Mortgage fraud is a major concern for Canadians. 29% of respondents express concerns about document falsification or title fraud. 73% of respondents are in favor of income verification by the Canada Revenue Agency to prevent fraud.