More than two-thirds of Canadians want to reduce their debt, but the vast majority has not been able to accomplish that goal during the past year.
A Manulife Bank of Canada survey found 69% of Canadians ranked becoming debt-free as a top financial priority. However, temptingly low interest rates have enticed Canadians to borrow and boost spending.
About 29% of respondents said they increased their debt load in the past year, up 2% from a similar poll conducted in April. Only 16% of Canadians said they reduced their debt levels, however, by far less than they expected.
For most Canadians, mortgage debt is the largest portion of their household debt, however, the survey found 64% did not make any additional mortgage payments in the past year to shrink their debt load.
Despite the lack of progress in cutting household debt, Canadians remain financially solvent.
The survey found only 17% would have difficulty in making their regular mortgage payments if the primary household income earner lost his or her job. About 43% said they would start having difficulty within three months and 40% said they could still keep paying their mortgage for up to a year before facing difficulties.
In B.C., the vast majority of the 596,000 mortgage holders in B.C. are current on their mortgage payments with only 0.42%, or 2,534 mortgage holders, behind on their payments for three months or more (See “Post-recession mortgage market still solvent” – issue 1089, September 7-13).