Canadians Appear Prepared For Mortgage Rate Hikes

After news that Canadians have accumulated enormous amounts of household debt in recent years, it was refreshing to get some more positive news. A recent Canada Mortgage and Housing Corporation (CMHC) survey found that, by and large, Canadians were fairly studious and responsible when it came to planning out their household budgets.
The survey found that 80% of Canadians follow a household budget, an important tool to managing one’s finances in all economic times. More important to the situation we currently find ourselves in, the survey found that 71% of Canadians had taken into account the effect that impending higher mortgage rates would have on their financial situation. A number of Canadian homeowners have taken the opportunity to further reduce their total interest payment with 39% reporting that they pay more than the minimum monthly requirement and 20% reporting that they have made a lump-sum payment towards their mortgage.
Nevertheless, the survey provides some points for improvement with first time buyers particularly uneducated on matters of household budgeting and debt. Only 23% of first time buyers received any advice on budgeting, while only 18% received advice on debt management. These undereducated homeowners would be well served pursuing the advice of knowledgeable mortgage brokers prior to entering the housing market in order to get a better handle on the effect of their new mortgage payments on their broader household budget.