Nearly 1 in 4 homeowners would have to sell home if interest rates rise more: Survey

Nearly one in four homeowners say they will have to sell their home if interest rates go up further, according to a new debt survey from Manulife Bank of Canada.

The survey, conducted between April 14 and April 20, also found that 18 per cent of homeowners polled are already at a stage where they can’t afford their homes.

Over one in five Canadians expect rising interest rates to have a “significant negative impact” on their overall mortgage, debt and financial situation, the survey found.

The Bank of Canada remains on a rate-hike path as it tries to tame inflation, which is now at a 31-year high at 6.8 per cent. On June 1, the central bank increased its key interest rate by half a percentage point to 1.5 per cent.

The Manulife survey also found that two-thirds of Canadians do not view home ownership as affordable in their local community.

Additionally, close to half of indebted Canadians say debt is impacting their mental health, and almost 50 per cent of Canadians say they would struggle to handle surprise expenses.

Pamela George, a personal finance expert, told The Sam Laprade Show on Monday, June 13 said the latest survey was heartbreaking to see. 

“Everybody wants to get into the housing market,” she added. “You have to remember that when you own a home, you become are the landlord.”

George noted that many of her clients after creating a spending budget feel a sense of freedom they never felt before. 

“I cut out the middle man,” she said. “I am not buying meat from the supermarket, I but from a farm and I am saving a lot more.'

Listen to the full interview with Pamela George below: