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.
More than 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 of 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.
Low interest rates during the pandemic fuelled a surge in real estate demand that led housing prices to soar.
"Some Canadians made decisions to take their mortgages out based on what they could be approved for and maybe didn't get some financialadvice to say, well, 'I know I can get approved for a mortgage at this particular level, but what can I actually afford?'" said Lysa Fitzgerald, vice-president of sales at Manulife.
But Fitzgerald says it's important to remember that the survey is an indication of how Canadians feel about their financial situation rather than a reflection of their actual financial risk.
