Have questions about the costs of borrowing? As interest rates and housing affordability becomes a growing concern for many Canadians, it’s essential to explore strategies to navigate these challenges effectively.
Understanding the Current Housing Landscape
In recent years, the Canadian housing market has transformed significantly. With the rise of remote work, suburbs and rural areas have become more appealing, leading to increased demand for recreational properties. However, the primary driver behind these housing shifts is the need for individuals to find homes that better suit their needs in terms of size and location.
Key Findings From the Manulife Bank 2022 Fall Debt Survey
The Manulife Bank 2022 Fall Debt Survey revealed several key findings. A staggering 81% of respondents believe that Canada is facing an affordable housing crisis. Additionally, 67% of homeowners are worried about making their mortgage payments, and 71% are worried about how much they owe on their mortgage. It’s worth noting that 53% admit they would struggle with handling any unexpected expenses, while more than half of respondents say that their spending is outpacing their income. Unsurprisingly, 48% of Canadians feel overwhelmed by their financial situation.
Strategies to Become Mortgage-Free Sooner
To help individuals improve their financial situations and reduce mortgage stress related to the costs of borrowing, I recommend focusing on the three following components:
- Obtaining the lowest interest rate possible. It’s important also to understand how interest is calculated, whether through compound or simple interest.
- Emphasizing principal reduction. This can be instrumental in minimizing interest accumulation over time.
- Shortening the amortization period for your mortgage. This too can greatly benefit your financial goals.
Strategies to Reduce Mortgage Stress Related to the Costs of Borrowing
There are a number of strategies you can follow to help alleviate mortgage stress and improve financial well-being. These strategies include:
- Identifying the source of mortgage anxiety
- Aligning payment schedules with one’s paycheque
- Adopting a biweekly payment plan
- Renewing mortgages earlier for better rates
- Considering insurance coverage to protect against unexpected life events
By consistently examining and implementing these strategies, you can take better control of your mortgage and secure a more stable future.
As affordable housing concerns persist, it is crucial to stay informed and proactive. By understanding the components that contribute to mortgage stress and implementing effective strategies to tackle them, you can achieve financial peace of mind. Please watch the video below and contact us to learn more.
Taylor Szeto, B.Comm.
Account Representative, Manulife Securities Investment Services Inc.
Insurance Representative, Wiegers Financial and Insurance Planning Services Ltd.
Taylor Szeto and Manulife Securities Investment Services Inc. (“Manulife Securities”) do not make any representation that the information in any linked site and/or 3rd party articles is accurate and will not accept any responsibility or liability for any inaccuracies in the information not maintained by them, such as 3rd party articles and/or linked sites.
The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Investment Services Inc.
Mutual funds are offered through Manulife Securities Investment Services Inc. Insurance products and services are offered through Wiegers Financial and Insurance Planning Services Ltd. Banking products and services are offered by referral arrangements through our related company Manulife Bank of Canada. Please confirm with your Advisor which company you are dealing with for each of your products and services.