Survey Reveals 70% of Mortgage Holders Fear Upcoming Renewal

Mortgage Professionals Canada (MPC) recently released its mid-year update of the Semi-Annual State of the Housing Market Report, highlighting trends and challenges faced by Canadian homeowners and potential buyers. This year’s findings reveal both ongoing financial anxieties and improving consumer sentiment about homeownership.

Anxiety Surrounding Mortgage Renewals

Among mortgage holders facing renewal within the next 12 months, 69% report feeling anxious about the process. While this marks a seven-percentage-point improvement from last year, anxiety levels remain high. Overall, nearly a third of Canadians expect to renew their mortgage in the coming year, and more than three-quarters (77%) anticipate a renewal within the next three years.

Borrower Adjustments for Mortgage Renewal

In preparation for upcoming renewals and expected payment increases, 61% of borrowers have cut back on spending. Additional strategies and concerns include:

• 17%: Changing jobs, taking on additional work, or planning to do so to afford payments.
• 14%: Concerns about missing one or more mortgage payments.
• 10%: Renting out a room or having already done so to offset costs.
• 10%: Selling their home or planning to sell to manage payments.
• 4%: Already missing one or more mortgage payments.

Financial Pressures on Canadian Homeowners

More Canadians report feeling less comfortable with their monthly cash flow and debt levels compared to last year. Key statistics include:

• 34%: Uncomfortable with monthly cash flow (+5 points from 2023).
• 38%: Uncomfortable with debt levels (+4 points).

Despite these challenges, there are signs of improvement in financial sentiment, with stress levels slightly declining.

Changing Perspectives on Homeownership

The survey reveals shifting attitudes among non-owners:

• 43%: Believe they will never be able to buy a home, a decrease of seven percentage points from last year.
• 18%: Expect to buy a home within the next year.
• 25%: Plan to enter the housing market within two years.

Overall, 42% of respondents now say it’s a good time to buy a home in their community, an 11-point improvement from 2023.

Key Insights into the Mortgage Market

Mortgage Types

• 75%: Hold fixed-rate mortgages (+3 points from last year).
• 20%: Have variable or adjustable rates (-3 points).
• 3%: Have hybrid mortgages (unchanged).

Penalties for Breaking Mortgages

• 10%: Paid a penalty when breaking their most recent mortgage (-1 point).
• $4,371: Average penalty paid.

Home Equity Lines of Credit (HELOCs)

• 44%: Have access to a HELOC.
• 51%: Have never borrowed against their HELOC.
• $115,901: Average home equity available via HELOC.
• $32,672: Average amount borrowed from HELOC.

HELOC Usage

• 38%: For home renovations (+2 points).
• 37%: For debt consolidation and repayment (+4 points).
• 29%: To make a purchase (+9 points).
• 21%: For investments (-1 point).
• 12%: To gift or lend to family (+4 points).

Actions to Accelerate Mortgage Repayment

• 55%: Have taken steps to shorten their amortization period (+4 points).
• 36%: Increased payment amounts or frequency.
• 19%: Made a one-time lump-sum payment (+4 points).
• 15%: Made multiple lump-sum payments.
• 28%: Combined lump-sum and accelerated payments.

Use of Mortgage Professionals and Lenders

• 33%: Used a mortgage broker (-1 point).
• 56%: Used a bank.
• 64%: Used the same mortgage professional when refinancing (-1 point).
• 74%: Used the same lender (-5 points).

Opinions on Private Lenders

• 38%: Have not used and would not consider using a private lender.
• 28%: Have not used but would consider using one.
• 5%: Have used a private lender.
• 2%: Have used but would not use one again.

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The 2024 MPC Consumer Survey highlights the evolving challenges and opportunities in Canada’s housing market. While financial anxiety persists, the survey also reveals growing optimism among Canadians about homeownership. With 42% of respondents believing now is a good time to buy a home, the data suggests improving consumer sentiment could positively impact the housing market in the years to come.