Global survey: 1 in 5 current mortgage holders say they'd struggle if rates rise, yet Canadians amongst the least likely to shop around

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Global survey: 1 in 5 current mortgage holders say they'd struggle if rates rise, yet Canadians amongst the least likely to shop around

Canada NewsWire

VANCOUVER, Feb. 28, 2018 /CNW/ - Based on a survey of 10,000 people across 10 countries including Canada, the latest findings from HSBC's Beyond the Bricks global research series offers deeper insights into how a shift from the low interest rate environment could affect Canadian homeowners, and how they compare against their global peers. 

Hitting the switch: Almost two-fifths of home owners in Canada have changed mortgage provider (CNW Group/HSBC Bank Canada)

Key findings at-a-glance:

Country

Haven't seen

a rate rise on

their current

mortgage

Would struggle or not be able

to  afford a 2 point mortgage

rate rise

Would struggle or not be able

to afford a 5 point mortgage

rate rise

Current

Prospective

Current

Prospective

France

97%

36%

37%

57%

51%

USA

87%

24%

24%

45%

44%

UK

84%

16%

25%

35%

38%

Canada

78%

20%

24%

48%

46%

Taiwan

74%

18%

40%

48%

57%

Australia

73%

18%

28%

41%

48%

China

64%

13%

30%

37%

53%

Singapore

61%

22%

33%

54%

60%

Malaysia

58%

27%

43%

51%

43%

Mexico

55%

26%

30%

51%

30%

Average

75%

22%

32%

47%

52%

Key highlights:

  • A better deal you say? No thank you, we're Canadian. Mortgage holders in Canada are amongst the least likely across all markets surveyed to say they've looked around to see if they can get a better mortgage rate (Canada: 50%, global average: 61%). According to the research, the most active mortgage rate deal-hunters are in France (79%), Malaysia (72%), and China (69%).
  • Prospective homebuyers: best-prepared or overly-optimistic? While one in four (24%) prospective homebuyers in Canada say they expect they'd struggle or not be able to afford a 2 point mortgage rate rise, they are the least likely across all 10 markets surveyed to feel this way (global average: 32%). Prospective home buyers who are most likely to struggle with a 2 point mortgage rate increase are in Malaysia (43%), Taiwan (40%), and France (37%).
  • Like vinyl records and barber shops, higher interest rates may be making a come-back: Almost four in five (78%) current mortgage holders in Canada report they've never experienced a rise in the interest rate on their current mortgage/home loan. Those most likely to have never seen an increase are in France (97%), the US (87%) and the UK (84%).
  • Standing on our financial tippy-toes: Despite the affordability challenge and the prospect of rising interest rates, about two in five (37%) prospective homebuyers in Canada are willing to stretch themselves financially to afford a better home (global average: 41%). The most 'financially-flexible' prospective buyers are in Mexico (59%), France (56%) and Malaysia (50%), whereas the least flexible are in Taiwan (29%), Singapore (32%) and the US (34%).

"While faring better than many of their global peers, up to one in four current and prospective home buyers expect they'd struggle if mortgage rates were to continue to rise," said Larry Tomei, Executive Vice President and Head of Retail Banking and Wealth Management, HSBC Bank Canada. "Whether you're considering locking in your rate or looking to strike a balance with a variable rate, it's important to factor potential rate rises into household budgets and of course to shop around for the best possible rate."

Tips for current and prospective mortgage holders:

  • A few simple calculations can go a long way. Use a mortgage calculator to get a clear perspective on your specific situation. Enter a mortgage rate that is 2 points higher to see how you'll fair.
  • Get pre-approved to bring confidence to the table when looking. This empowers you to negotiate from a position of strength, knowing that financing will not be an issue when your offer is accepted.
  • When diving in to the market, make sure you have a life vest. Part of a good financial plan includes planning for the unexpected, so considering creditor or separate insurance is a must.
  • More than ever, shop for the best rate, offered by a secure institution. Visit the HSBC Bank Canada mortgage centre online for more information about HSBC's mortgage solutions.

Notes to editors:

1)

Beyond the Bricks is an independent consumer research study into global home ownership, commissioned by HSBC. It provides authoritative insights into peoples' attitudes and behaviour towards home buying, renting and funding around the world.


The value of home survey represents the views of 10,005 people in 10 countries: Australia, Canada (1000), China, France, Malaysia, Mexico, Singapore, Taiwan, UK and USA.


The findings are based on a survey of current and prospective home owners aged 21 or older from a nationally representative online sample in each country. The research was conducted by Kantar TNS in September and October 2017.

2)

HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in the country. We help companies and individuals across Canada to do business and manage their finances internationally through three global business lines: Commercial Banking, Global Banking and Markets, and Retail Banking and Wealth Management. Canada is a priority market for the HSBC Group – one of the world's largest banking and financial services groups with assets of US$2,522bn at 31 December 2017. Linked by advanced technology, HSBC serves customers worldwide through an international network of around 3,900 offices in 67 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. For more information visit www.hsbc.ca or follow us on Twitter: @hsbc_ca or Facebook: @HSBCCanada

SOURCE HSBC Bank Canada

View original content with multimedia: http://www.newswire.ca/en/releases/archive/February2018/28/c5896.html

Copyright CNW Group 2018

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