An emergency fund is meant to be there in times of need, but a new survey suggests nearly half of Canadian homeowners would be ill prepared for a personal financial dilemma such as job loss.
Zero savings and significant mortgage debt in a world with no job security. Add a family and it's an extremely stressful life.
Manulife says among those polled, homeowners had an average of $174,000 in mortgage debt, with an average of 28 per cent of their net income going toward paying off their home each month.
About half (46 per cent) of those polled say they would have difficulty making their monthly mortgage payments in less than six months if their household’s primary income earner lost his or her job.
Canadian banks have slowly started raising interest rates already. Looking at historical patterns, interest rates will go up in the next few years. This is going to suck for a lot of Canadians who splurged on new homes in the last five years. The shock is going to be two-fold: their mortgage payments will increase while their house price slumps!