Nearly 25% of homeowners with a mortgage say they will have to sell their home if interest rates continue to rise.
This is according to a new Manulife bank debt survey that looks at the impact of interest rates, inflation and housing prices on affordability in Canada.
Among those surveyed, fewer than half feel prepared for rising interest rates, inflation or housing prices. As a result, almost 50% of Canadians say they would struggle to handle unexpected expenses or are reconsidering summer vacation plans due to money concerns.
The Bank of Canada remains on a rate-hike path as it tries to tackle inflation, which is now at a three-decade high of 6.8%. On June 1, the central bank increased its key interest rate by half a percentage point to 1.5%. The next scheduled date for announcing the overnight rate target is July 13.
The survey responses also reveal 80% of Canadians think there is an affordability crisis, a figure that suggests this is a major issue that might become worse if inflation continues its upward trajectory.
Additionally, two-thirds of respondents view home ownership as out of reach in their local community.