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Homeowners face increasing pressure from latest Bank of Canada rate hike

Rising interest rates continue to slow the number of homes changing hands and hitting the market, according to a real estate agent and a mortgage broker.
Rising interest rates continue to slow the number of homes changing hands and hitting the market, according to a real estate agent and a mortgage broker. Photo by iStock /GETTY IMAGES

One-third of homeowners with a financial burden attached to their residence say the aren’t going to make it with the latest Bank of Canada prime lending rate hike of 4.50%, a new poll finds.

The Yahoo Canada and Maru Public Opinion poll says those people say they will likely have to sell their home after 9.7 months.

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“The findings also reveal that escalating interest rates have had an impact on the vast majority of Canadians (71%), especially among homeowners with financial encumbrances attached to their residences,” the poll said. “To put a fine point on it, even half (52%) of those homeowners without a loan/mortgage admit to being affected by rising rates.”

It went on to say 29% had not been impacted by rising interest rates.

Thirty-eight per cent say the rates cause anxiety but it is manageable, and 22% say the rates cause serious pressures.

Of the six in ten Canadians who own their home, 57% say they have some form of financial arrangement tied to the ownership of the residence, with the remainder 43% are free of any burden.

“It’s fair to note that escalating interest rates may have had an impact on those without a loan on their house because of other forms of credit, such as credit cards, or personal or co-signed loans they have made to others they may have. With that considered, the following is the most applicable impact that raising rates has had on homeowners themselves and or their families nowadays:,” the poll said.

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Nineteen percent of those with a variable or adjustable mortgage sat they have had to make drastic financial adjustments and lifestyle changes.

Eleven percent with a fixed rate mortgage say they have had to make changes to their lifestyles, 9% with a line of credit on their home needed to make financial adjustments.

The poll was conducted on Jan. 23 and 24 with a random selection of 3,074 Canadian adults who are Maru Voice Canada online panelists and the estimated margin of error is plus or minus 2.2%.