Prospective buyers are also making concessions, 55 per cent of prospective buyers are reducing non-essential expenses and 31 per cent are drawing from investments
As global events continue to introduce financial uncertainty and housing affordability remains top of mind for Canadians, a new survey from TD Bank Group revealed the challenges that mortgage renewers face. Nearly half (45 per cent) of those renewing in the next year expect higher monthly payments and 57 per cent anticipate an impact to their living situation. Of these renewers, 73 per cent say they’ll need to cut back on spending to keep up.
Despite interest rates generally trending downward in recent months, they have not reached the historic lows that Canadians experienced for over a decade ending in 2022. With nearly a quarter (22 per cent) of those surveyed set to renew their mortgages in the next year, many plan to adjust their overall financial approach:
- 43 per cent say they will need to put their renovations on pause;
- 29 per cent say they will need to sell their home and buy a more affordable one, or downsize;
- 15 per cent say they will need to consider moving in with a roommate to share costs;
- 15 per cent say they will need to move to a different neighbourhood.
“While our survey found that 75 per cent of those preparing to renew their mortgage this year are leaning towards a fixed instead of a variable rate mortgage, it’s important to remember that there isn’t a one-size-fits-all approach to choosing what will work for you,” said Patrick Smith, Vice President, Product Management, Real Estate Secured Lending at TD. “We know Canadians are looking for quick and valuable mortgage advice, and TD is here to support with that. By providing tailored insights, our mortgage specialists can help you understand your options and create a strategy that can work for your unique needs.”
Despite a cooling of the market in front end of the year, prospective buyers are also considering concessions in the hopes of making a move in the housing market and are adjusting their financial approach to do so. According to survey results, 55 per cent of prospective buyers polled are reducing their non-essential expenses, while 31 per cent are planning on cashing in their current investments, such as Tax Free Savings Accounts, Registered Retirement Savings Plans, and First Home Savings Accounts.
The Value of Advice
As Canadians continue to pursue their homeownership ambitions, whether purchasing their first home, selling their existing one, or simply looking to better understand the mortgage process, seeking advice is key, yet only 35 per cent of those surveyed have sought out homeownership advice. Nearly four in ten (39 per cent) prospective buyers polled say quick access to advice from a professional would make them more confident in their ability to keep up with the Canadian housing market.
“As Canadians navigate a dynamic economy that seems to be evolving daily, we understand how challenging it can be for them to know if they’re making the right decision when it comes to real estate,” added Smith. “Different factors can impact each individual’s home buying decisions in unique ways. No matter their current reality, TD can offer advice to help you make those important financial decisions with confidence.”
Navigating the Emotions of Homebuying
While many Canadians remain steadfast in their pursuit of owning a home, prospective buyers polled admit the process can also stir up mixed emotions. Some Canadians polled feel stress (45 per cent) and anxiety (38 per cent) while navigating the homebuying journey; despite this, Canadians polled also say the process brought on feelings of excitement (34 per cent), hopefulness (33 per cent), and optimism (32 per cent).
Although the homebuying experience will be unique for everyone – bringing different challenges, outcomes, and emotions – Canadians looking to make a move in the housing market can benefit from advice as they navigate this stage of their journey.
Looking for mortgage help ASAP? Simply answer a few questions and TD Mortgage Direct will match you with a TD Mortgage Specialist who can work with you to provide mortgage advice personalized for your home ownership journey.
