Canada

Canadians Cite Difficulty Paying Mortgages, Even Without Pandemic’s Financial Impact

Most Canadians believe they’ll be able to pay their mortgage during the pandemic, it just won’t be easy for all. Mortgage Pros Canada (MPC), an industry group representing mortgage brokers, conducted a borrower survey on the impact of the pandemic. The survey yielded a number of interesting insights, but the most interest was the ability to pay. Most people are able to pay, but even some without a loss of income say they’ll struggle to pay their mortgage.

Canadians Without A Loss of Income Say It’ll Be Difficult To Pay Their Mortgage

The vast majority of homeowners without a loss of income, are ready to pay their mortgage. Of these people, the survey found 67% will continue to make payments without a problem. Another 24% will make their payments, but with some difficulty. Overall, fewer than one in ten of people in this demographic will not be able to pay their mortgage regularly.

Canadian Expected Difficulty Making Mortgage Payments

MPC survey results of expected change to mortgage payments, by the impact of the pandemic on employment and/or income.
Source: Mortgage Pros Canada. Better Dwelling.

While that sounds great, that’s still one in ten people unable to make payments without a change to income. Of those people, 7% will find it very difficult to do. Only 2% of these people feel they will have to resort to partial or infrequent payments. It’s not a huge number of people, but it’s still a little odd to see this many struggling to pay with no change in income.

Only 24% of People That Lost Income During The Pandemic Will Do So Without Issue

Those with income impaired by the pandemic find it more difficult to pay their mortgages. Only 24% of people in this demographic said they would make regular payments without any issues. The majority, 54%, said they would make their payments but with some difficulty. Another 15% said they would continue to make payments, but find it extremely difficult. Those that will have to make infrequent or partial payments jumps to 5% in this cohort. Then there’s something unfound in the previous demographic – 2% will not be able to pay their mortgage.  

Most People Unemployed Before The Pandemic Have No Problem Paying Their Mortgage

One of the more surprising data points is from those unemployed before the pandemic. The majority, 57%, of this demographic feel they’ll have no problem making payments – yes, that’s higher than those with income loss. Another 36% say they’ll make their regular payments, with some difficulty. Only 3% feel they could make regular payments, but with a lot of difficulty. None said they would make infrequent payments, but 4% said they would not be able to make payments at all. It’s interesting to see two extremes with this demographic. More people are confident in their ability to pay, than those that lost income. At the same time, more people are confident in their inability to pay as well.

There’s a couple of things to keep in mind in terms of survey data, and the weighting of the group. People are notoriously bad at self-assessing their own risk. This would mean it’s likely people are overestimating their own ability to pay.  The majority of people also haven’t seen an impact to their income during the pandemic. This means fewer people know they’ll be unable to pay their mortgage, than if all categories had equal weight. That’s one big reason for this number to be an underestimate, and another for it to be an overestimate.

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29 Comments

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  • Pete 3 weeks ago

    Remember all of those $200 dollars from bankruptcy surveys? There’s a lot of people that can’t handle their bills, and they’ll expect the government to continually make sure they can.

  • Y CND 3 weeks ago

    I love this country, but Toronto housing is now unaffordable even for professionals. Can we bring down housing cost and punished hoarders?

    I dont want to move to another place just to live with dignity and security. People with only one home they live in are not negatively affected when real estate prices drop. Why are we protecting real estate speculators?

    • SH 3 weeks ago

      The Baby Boomers care more about their houses than they do about their kids. It’s just how it is and nothing will change as long as Boomers comprise a sizable voting block. Speculators will continue to be protected.

      • alvi 3 weeks ago

        Yeah and of course you(along with Jesus) are completely “selfless”

        • SH 3 weeks ago

          Never said I was. Being selfish is human nature. But as with anything, there are degrees. And I think it will be centuries before humankind witnesses another generation as selfish and self-absorbed as the Boomers. Oh and to show my impartiality, I think Millennials are idiots for voting against their interests by putting Trudeau in power.

    • alvi 3 weeks ago

      You wanna “bring down housing” we need to normalize interest rates and reduce government spending and stop protecting government workers from the vagaries of the market.

    • alvi 3 weeks ago

      Wrong question, we should be asking why do we continually allow governments to buy votes and placate public sector workers on borrowed money?

    • Mtl_matt 3 weeks ago

      Ownership of several detached houses should be severely taxed to the point of making it prohibitively expensive. Maybe add an exception that if it was your primary residence for ten or more years you have ten years until the tax applies to you. For condos start taxing after 3+, multi-units no tax.

      • Groot 3 weeks ago

        Good luck with that. A lot of these politicians have real estate holds themselves.

      • alvi 3 weeks ago

        Nah no new taxes until governments can prove what they receive already is well spent, why should bureaucracies be rewarded with constant tax increase?

      • AW 3 weeks ago

        This is why I left. Corruption at its finest when a 1st grade teacher makes more than a lawyer

        • Chris Campbell 3 weeks ago

          I’m wondering where you get your figures for comparing a primary school teacher’s salary to a lawyer’s. Median salary of a lawyer is tens of thou higher: 100-110 k vs 60-70k.

  • V 3 weeks ago

    Property prices need to come down and realistically lowering interest rates to prop up housing is not a good idea. Now you have properties skyrocketing and people being enticed to buy because of lower interest rates. Very bad idea. Property prices continuing to go up and up is actually going to cause more poverty. Rents will be too high because of what landlords need to make to break even. Just let it fall 20% and correct a bit.

    • X 3 weeks ago

      20% wouldn’t be enough. BOC stressed tested to 40%. Speculators will get burned but who cares. It serves them right for playing monopoly with residential property. Homes are for people to live in and not to be traded like stocks.

      • The Truth Will Set You Free 3 weeks ago

        In order to bring home prices in line with where average income levels are home price averages would have to come down by at least 50% or to an average of about 350k-400k. Condos would have to drop back down to around 200k or less with full detached homes starting at or around 400k in the major cities. This will become a reality once all these government subsidies and programs end…especially when the wage subsidy ends and companies lay off the people they don’t need and unemployment rises to 25%.

  • Kyle 3 weeks ago

    Prices will keep going up and up and up. Till we reach New York/Manhattan levels. Analyze all you want, That’s just the way big metropolitan cities work in North America and world wide.

    • Average Man 3 weeks ago

      Do you know what prices in Manhattan have been doing lately?

      https://www.6sqft.com/nyc-neighborhoods-real-estate-listing-price-drops-during-covid/

      • questionguy 3 weeks ago

        ok, but Manhattan isn’t NYC… what about the outer boroughs?

        we wont hit NYC prices, bc we’re not NYC, but I agree prices will, long term, go up.

        right now, unfortunately, we’re ripe for a crash

    • Fight Back 3 weeks ago

      Kyle, did you know you are a dumba$$

      • RM 3 weeks ago

        Whoa, whoa, whoa… this is not the place for name-calling. Make a sensible rebuttal or keep it to yourself.

    • Bob Odenkirk 3 weeks ago

      We already are at Manhattan levels in terms of cost. It’s very easy (and has been for the past 2 years) to find comparable or cheaper apartments or condos in NYC than in Toronto, even with the conversion rate.

      In addition, if you’re working as a professional, you will be earning a higher salary in NYC than here, which makes for an even bigger delta.

      Either way you slice it, Toronto is far and away overpriced. We’re not NYC (or any other comparable global city) and it makes no sense for housing to cost as much as it does here.

      • alvi 3 weeks ago

        Toronto is cheap by global standards

        • SH 3 weeks ago

          No it isn’t. Nice realtor propaganda. Toronto is now about up there with Paris and Sydney prices. There are very few places left in the world with more expensive real estate than Toronto, and especially Vancouver. From an income to price, Toronto is more expensive than most of NYC aside from Manhattan south of Harlem.

    • Forever Renter 3 weeks ago

      We hit the New York thresh hold back in 2017 and they are still going up. Personally I really don’t think anything can stop Toronto prices from going up. They are clearly being manipulated by an invisible force that will not allow for any sort of price decline.

      https://www.huffingtonpost.ca/2017/01/24/toronto-nyc-affordability-house-prices_n_14344230.html#:~:text=According%20to%20new%20data%20from,and%20C%24830%2C100%20in%20Vancouver.&text=Since%20then%2C%20TO%20prices%20have%20run%20away%20from%20NYC%20prices.

    • alvi 3 weeks ago

      Not as bullish as you but certainly not as bearish as so many posters here

    • Itchy Bear 3 weeks ago

      I’ve got a friend in Manhattan mid town whose building is 1/4 empty, offering two months free and rent reductions to existing tenants to renew leases.
      She’s earning 2.5x what she earned in Toronto and pays about 50% more than she would pay here for a far nicer apartment than you would ever see in Toronto.
      If you think Toronto can compare to Manhattan, you’ve never really been to one of these cities.

      • RM 3 weeks ago

        … yep… what he said.

      • The Truth Will Set You Free 3 weeks ago

        That’s the thing that people in Toronto don’t seem to understand. The average yearly income of people working in cities that Toronto realtors/banks/politicians/media personalities/etc. have been promoting Toronto to be like (Manhattan/Milan/etc.) is significantly more. So if a home in Manhattan for example is 1 million and the very same home here in Toronto is 1 million the difference is that here the cost of the home is 12 times average yearly familial earnings whereas the one in Manhattan is only 4-5 years earnings. It really is sad though…for a Country that’s promoted as having a top notch education system their citizens really aren’t that smart as they allow certain entities to manipulate them and their ideas.

        • Groot 3 weeks ago

          Canada is a harbor for international money laundering through shell companies and straw borrowers. The private mortgage lending space is not regulated for how they lend so they do not have to conduct the same type of in depth verification of funds as do Banks, Trust Companies, and Monoline lenders. It’s no surprise that the fastest growing segment of the mortgage industry is the Private lending space .

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