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

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. 

Key findings at-a-glance:

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," saidLarry 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.

SOURCE HSBC Bank Canada