Canadians Have Growing Concerns Over Mortgage Qualification
Tuesday, January 14, 2020 12:00:00 PM
- More than half of Canadians (56%) See Qualifying for a Mortgage as Barrier to Home Ownership, Up 6 Points from 2018. - -
(Zillow) - For many Canadians, buying a home can be a challenging and stressful experience. According to a recent survey from Zillow and Ipsos, 92% of Canadians see at least one barrier to home ownership, and two of the top concerns are related to the mortgage process.
Canadians report feeling pressured by stricter mortgage regulations that went into effect in 2018 and Zillow's recent survey found that 56% of Canadians see qualifying for a mortgage as a barrier to home ownership, a six-point increase from 2018. This concern rises to 64% for consumers who recently purchased a home, likely linked to the mortgage regulation changes looming at the time of their home search. After mortgage qualification, the next top worry for buyers is whether they can afford the mortgage payment: More than half (54%) report this as a barrier.
New and stricter mortgage requirements took effect in January 2018 with the addition of a stress test, requiring borrowers to qualify under a higher rate. The rule only applies to newly originated mortgages and is designed to prevent borrowers from taking on more debt than they can handle if interest rates go up. Since its passing, buyers' worries are growing according to the survey. Half of Canadians (51%) say they are concerned that stricter rules will prevent them from qualifying for a mortgage, up five points since 2018.
These mortgage regulations could impact a substantial portion of potential buyers, as the survey results show a large share of Canadian homeowners (80%) get mortgages. Younger home shoppers also feel the weight of the law. Sixty-nine percent of those 18-34 years old are concerned about qualifying for a mortgage under the stricter guidelines. This worry is also present for current renters who may be considering the purchase of their first home: 66% express concerns about mortgage qualification under stricter guidelines.
These are some of the findings of an Ipsos poll conducted between September 24 and October 8, 2019, on behalf of Zillow. For this survey, a sample of 1,503 Canadians aged 18+ was interviewed online via the Ipsos I-Say panel.