The Impact of Interest Rate Rises on Mortgage Holders in B.C.

November 28, 2022

Leger recently surveyed mortgage holders in B.C. about how increasing interest rates are impacting their ability to pay their mortgages.

SOME OF THE KEY HIGHLIGHTS OF OUR SURVEY OF MORTGAGE HOLDERS IN B.C. INCLUDE…

MORTGAGE HOLDERS IN B.C. ARE VERY SENSITIVE TO INTEREST RATE INCREASES IN THEIR MORTGAGE RATES

Fifteen percent of them would find it a significant challenge to absorb an increase of 1% to their current mortgage rate, and this number jumps for every basis point increase (26% for a 2% increase, 59% for a 3% increase).

THOSE WITH VARIABLE-RATE MORTGAGES ARE MORE STRESSED THAN THOSE WITH FIXED-RATE MORTGAGES

69% of variable-rate mortgage holders in B.C. are stressed about their current mortgage payments, versus 46% of those with a fixed rate.

MOST MORTGAGE HOLDERS IN B.C. HAVE HAD TO TAKE FINANCIAL ACTION TO MAKE THEIR MORTGAGE PAYMENTS

Nearly two-thirds have taken financial action to make their current mortgage payments, the top two methods are cutting household spending (36%) and cutting back on vacations (25%).

CURRENT MORTGAGE RATES ARE DETERRING ASPIRING HOME BUYERS FROM PURCHASING A HOME

Seven-in-ten non-mortgage holders who have considered purchasing a home in the past two years claim that the current mortgage rates make them less likely to buy a home, with two-in-ten saying the rates will completely prevent them from buying.

SURVEY METHODOLOGY

  • A web survey was conducted among 1,003 British Columbia residents, 18 years of age or older, via Leger’s online panel, LEO.
  • The data was collected from November 12 to 14, 2022.
  • Using data from the 2021 census, the results were weighted according to age, gender and region in order to ensure a representative sample of the population of British Columbia.
  • No margin of error can be associated with a non-probability sample.  However, for comparative purposes, a probability sample of 1,003 respondents would have a margin of error of ±3.1%, 19 times out of 20.

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