A new Angus Reid survey has found the majority of homeowners in Canada are concerned about what higher interest rates will mean for their monthly payments when it comes time to renew.
Seventy-seven per cent of respondents, regardless if they had a fixed or variable rate, say they are worried about their next mortgage renewal.
Newer buyers with a mortgage amortization of 25 years or longer were much more likely to say they were "very worried" about renewing compared to those who have owned their home for longer and had more equity built up, according to the survey, which was released on Tuesday.
Variable and fixed mortgage rates have soared to the mid-single digits from ultra-low levels in just over a year in the wake of the Bank of Canada's aggressive tightening campaign.
The impact has been more immediate for variable rate mortgage holders, since their amortizations have lengthened or their payments have increased after hitting their trigger rate (the point at which their monthly payment no longer covers the entire interest owed).
Adding to the dismay of some homeowners, many economists and investors are now expecting the central bank to largely keep its benchmark rate unchanged this year or hike one more time. It's a stark contrast to previous market expectations that the Bank of Canada could start cutting rates this fall.
The survey found 30 per cent of homeowners were having a tough or difficult time with their mortgage, but that number rose to 51 per cent for those with a variable rate.
"Challenges for those with variable rates – seeing their payments increase unexpectedly over the past year or more – are evident when analyzing other behaviours. These individuals are much more likely to say that they have been cutting back in other areas of their lives, including delaying major purchases or contributions to savings," Angus Reid said in the release.
Half of homeowners with a variable rate mortgage say they have had to dip into savings from an account they try not to touch, compared with 45 per cent of fixed rate mortgage holders, the survey found.
To a much lesser extent, some homeowners also reported having to borrow money from friends or family, sell assets such as a car or stocks, or take out a bank loan to keep up with their expenses.
The Angus Reid survey was conducted online over the last two days of March and sampled 1,600 Canadian adults. It has a margin of error of plus or minus two percentage points, 19 times out of 20.
Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.