More than 30% of Ontario homeowners can't afford much more than their mortgages
Ontario residents are growing increasingly stressed out about money, debt, and the ability to cover even their basic living expenses, according to the latest MNP Consumer Debt Index, which this time around posted its highest self-reported insolvency rate in history to date.
And we can't blame the pandemic — at least not entirely.
"Three in 10 (31% of) Ontarians who own a home say they are house poor, meaning they don't have much left over after paying bills related to their home," reads the report, which is published quarterly based on the results of an Ipsos-conducted survey.
"All told, approximately two million homeowners in Ontario are susceptible to financial disruptions such as an interest rate increase or change to their job situation. Perhaps it is therefore not surprising two in 10 (18%) homeowners say they regret the amount of debt they took on to buy their home."
Real estate? Pushing people into insurmountable debt? Who'd have thought?
Low interest rates have only worsened the problem, according to MNP: Nearly six in 10 (58 per cent) of people indicated that they'd "taken advantage of low interest rates during the pandemic to make purchases that wouldn't normally fit within their budget."
Ontario is consequently struggling — more so than any other province, according to the index, with 46 per cent of local respondents indicating that they are "not confident they'll be able to cover all living and family expenses in the next 12 months without spending on credit."
MNP, Canada's largest insolvency practice, says that the number of Ontarians who are concerned about making ends meet has now reached its highest level since December of 2019. Insolvencies in particular are the highest they've been since the Debt Index was created back in 2017.
And yet, despite these concerns, 34 per cent of Ontarians say they plan to spend more money on things like travel, dining and entertainment in the months ahead as the economy reopens (at least partially, for now) after some 18 months in limbo.
"Many appear to be returning to shopping malls, restaurants and airplanes to celebrate the pandemic wind down," says Toronto-based MNP trustee Caryl Newbery-Mitchel. "Others will try to cope with new debts they accumulated during the pandemic. Even as Ontarians regain employment, the financial damage may linger for years."
"It is understandable many are seeking post-pandemic indulgences, but the ability to do so is by no means universal. Those who went into lockdown already deeply indebted and then experienced prolonged financial disruption are vulnerable right now," Newberry-Mitchell continues.
"They should not rush to return to pre-pandemic spending habits."
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