Mortgage renewals mean housing takes up 50% of many Canadians’ budgets

Nearly half of Canadian homeowners who renewed their mortgages in 2023 have found housing costs to exceed half of their household budget, according to a new survey by rates comparison website Rates.ca. The survey, conducted from July 24 to 26, reveals that 45% of households have seen their mortgage payments consume half or more of their total budget, in addition to utilities.

Financial experts warn that housing costs should not surpass 30% of household income, as suggested by the Royal Bank of Canada. Younger homeowners aged 18-34 experienced the most significant impact, with 90% renewing their mortgages at higher rates, and 56% facing housing costs that take up 50-70% of their budget. Foreign-born homeowners also faced substantial increases, with 50-70% of their housing costs impacting their budgets.

Young homeowners were more likely to choose longer mortgage terms, with 40% opting for five-year terms, while 35% selected three-year terms. Financial experts recommend that homeowners review their mortgage options at least 120 days before their renewal date to find the best rates, terms, and flexibility to manage their budgets effectively.