65% of Quebec homeowners would not be concerned should their mortgage rate increase - Clearfacts.ca – CROP* survey: The reflection of Quebecers’ financial position
Montreal, 15 March 2011 -
The results of the Clearfacts.ca* survey conducted by the polling firm CROP on savings and investment continue to surprise. In Quebec in 2010, while the majority of homeowners (66%) had a mortgage on their main residence, 27% stated that they are "not at all" concerned and 38% were “not very often” concerned that their mortgage payments might increase.
Young couples (53% "not at all" concerned ) and senior citizens (52% “not at all concerned”) are those whose minds seem to be most at ease. However, note that the majority of home owners (61%) have a fixed-rate mortgage, which protects them in the short-term against interest rate fluctuations.
Nevertheless, a deeper investigation into homeowners’ ability to repay their mortgages reveals a more disquieting portrait of the situation. If their mortgage payments were to increase by $100 per month (equivalent to a rate increase of 1% on a mortgage of $200,000* over a 25-year period at 4%), only half of homeowners (54%) state that they could “easily” continue making their mortgage payments, while 6% state that they would not be able to.
Single parent families are particularly vulnerable. 14% of them would not be able to handle an increase of $100 per month. Luckily, the majority of them (75%) are protected for the moment because most of them have a fixed-rate mortgage.
Young homeowners are also at risk, but for a very different reason: most of them have a long-term mortgage (47% of 18-34 year olds have mortgages of 30 years or more vs. only 17% among other homeowners), which leads us to believe that they probably don’t have enough money to borrow over a shorter period. Are young people too hasty when planning to buy their first house?
To find out more about Quebecers' housing preferences, view the third component of the Clearfacts.ca/CROP poll in "Quebecers reluctant to pay more for a mortgage" at www.clearfacts.ca.
*Methodology: Data were collected online from December 3 to 23, 2010 by web panels. In all, 1,814 questionnaires were completed. The results were weighted to reflect the distribution of Quebec's adult population by sex, age, region, language (in the Montreal area) and household size. Given the non-probability online sampling, the margin of error calculation does not apply.
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