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Table of Contents
- Manulife Bank homeowner debt survey: Introduction
- Manulife Bank homeowner debt survey: The survey
- Manulife Bank homeowner debt survey: The results
- Manulife Bank homeowner debt survey: Almost 75% could not handle a small rate increase
- Manulife Bank homeowner debt survey: Many homeowners have less than $5,000 in savings for an emergency
- Manulife Bank homeowner debt survey: If the main income earner lost his/her job, it would take no more than 3 months to be in mortgage default
- Manulife Bank homeowner debt survey: Manulife CEO states millennials not ready for a financial emergency
- Manulife Bank homeowner debt survey: What should you do if you have too much debt?
Manulife Bank homeowner debt survey: Introduction
Nearly 75% of Canadian property owners would certainly have problem paying their home mortgage each month states a Manulife Bank homeowner debt survey. This is the case if their monthly payment boosted by just 10%,
ALSO READ: CANADIANS CASHING IN RRSPs BEFORE RETIREMENT IS NOT A SOLUTION
Manulife Bank homeowner debt survey: The survey
The financial institution surveyed 2,098 home owners. They were between the ages of 20 to 69. They had family incomes of $50,000 or greater. It was an online survey conducted in February 2017.
Since these kinds of surveys typically aren’t randomized, experts claim the internet surveys do not have a margin of error. They state that the study however highlights simply exactly how limited the spending plans are for lots of Canadians.
Manulife Bank homeowner debt survey: The results
Manulife’s study claimed:
- 14% of participants would not stand up to any type of rise in their regular monthly payments;
- 38% of those surveyed claimed they might endure a repayment increase of between 1% to 5% before having a problem; and
- 20% stated they might tolerate an increase of between 6% to 10% before feeling the pinch.
Manulife Bank homeowner debt survey: Almost 75% could not handle a small rate increase
This poll indicates 72% of house owners surveyed could not endure an increase of 10% from their existing record low rates. Let me be clear. We are only talking about a 10% increase; not an increase to 10%. So, if you have a mortgage with a 3% rate of interest, 72% of those surveyed could not make ends meet with an increase in their mortgage interest rate to 3.3%!
That’s an unsafe area to be, with rate of interest readied to increase eventually.
“What these people don’t realize is that we’re at record low-interest rates today,” said Rick Lunny, president and CEO of Manulife.
Manulife Bank homeowner debt survey: Many homeowners have less than $5,000 in savings for an emergency
Overall, almost one-quarter (24%) of Canadian house owners surveyed claimed they have not been able to generate enough funds to pay an unforeseen expense in the past year. And, most are not healthy to weather any kind of economic tornado. About 50% of those questioned had $5,000 or less in reserve to manage an economic emergency. One fifth of them have absolutely nothing saved for a rainy day.
One quarter of millennials questioned had no savings. The same was true for 1 in 6 boomers.
ALSO READ: MANULIFE DEBT SURVEY: ARE YOU PART OF THE MAJORITY OF CANADIANS SCARED ABOUT RETIREMENT?
Manulife Bank homeowner debt survey: If the main income earner lost his/her job, it would take no more than 3 months to be in mortgage default
The study discovered that 45% of millennial house owners– those aged between 20 to 35– would certainly have one of the most problems making their mortgage payments within 3 months, if the main income-earner in their family were to suddenly end up being out of work.
Millennials were additionally the ones that typically had the highest amount of per head home related financial debt, at $223,000. Gen X-ers (those aged 36 to 52) had about $202,000 owing. The boomers (ages 53 to 70) had $180,000.
ALSO READ: AVERAGE HOUSEHOLD DEBT IN CANADA: CANADIANS LOVE TO MAKE IT CONTINUALLY RISE!
Manulife Bank homeowner debt survey: Manulife CEO states millennials not ready for a financial emergency
Lunny claimed many millennials are not ready to manage an economic emergency because of a poor or no financial education and rising debt. They have seen their home loan related financial debt increase greater than any other generation, per the study.
The study revealed a couple of various other distinctions between the generations. Practically half, (45%), of millennial home owners stated they got funding from their family when acquiring their very first residence. This compares to 37% of Generation X’ers and 31% of baby boomers.
Manulife Bank homeowner debt survey: What should you do if you have too much debt?
Could you handle all your debt obligations if on your next mortgage renewal, you had a mortgage rate increase of only 1%? Do you not have any money put away for a financial emergency? Do you worry how you are going to pay your other bills on time?
The Ira Smith Team is here to get you back on track to debt free living Starting Over, Starting Now. We can solve your problems with immediate action and the right plan for moving forward. All it takes is one phone call to book your free, no obligation consultation. Call us now.
