Resilience in the face of adversity

Inflation has tapered off, and the Bank of Canada seems to be holding the line on interest-rate increases (for now). Yet Canadians continue to struggle with debt, budgeting and saving for retirement. Our latest survey identifies key pain points and shows how Canadians are adapting to such a challenging environment.

Overall, the fall 2023 Manulife Bank Financial Health Survey reveals widespread pessimism. Across all metrics, a higher proportion feel that things are worse now than they were a year ago:

  • Two thirds of Canadians feel that their spending is outpacing their income.
  • 39% feel that they don’t have any control over their finances.
  • Almost everyone (94%) continues to worry about inflation.

Ironically, for many Canadians their greatest financial asset — their home — is also their chief source of anxiety.

No more home sweet home

There is widespread consensus (84%) that Canada is facing an affordable-housing crisis. Most Canadians are worried about housing prices in general, and while more than 70% of non-homeowners would like to buy a home, they can’t afford to. They worry about saving up for a house and/or making rent payments.

Homeowners, meanwhile, are facing their own challenges. Fewer than three in 10 Canadians own their home outright (that is, without a mortgage), and mortgage comfort levels are the lowest they’ve been since the inception of this survey. Among homeowners with mortgages, 70% worry about making their mortgage payment, 73% worry about the amount owing and 32% worry that they will be forced to sell their home if interest rates continue to rise.

But Canadians are nothing if not resilient.

Adapting to change

As interest rates have gone up, there has been a significant decline in variable-rate mortgages and a corresponding increase in fixed-rate mortgages. Among those that have mortgages, fixed-rate mortgages now stands at 70%. In addition, among homeowners whose mortgage is up for renewal in the next 12 months, more than half (54%) say they will go with a fixed-rate mortgage.

Homeowners looking for maximum adaptability might want to take a look at Manulife One, Canada’s most flexible mortgage. 

Manulife One is an all-in-one mortgage and banking account that allows you to increase or decrease your regular payment and access your home equity when you need it. Plus, you can customize your mortgage with sub-accounts that lock in a portion of your total debt with a fixed payment schedule and fixed or variable interest rate. Manulife One gives you the flexibility to be ready for whatever happens next.  

Focus on the future

While the current environment may be challenging, Canadians clearly understand what it takes to improve their financial health — saving and planning ahead. The majority (88%) have a dedicated savings account, and we’re seeing significant year-over-year increases in the number of people with retirement plans, written financial plans and debt-repayment plans. In addition, 41% are benefiting from the insight and guidance of a professional financial advisor.

Feeling overwhelmed by everything that’s going on? Some outside perspective may be helpful. Find an advisor near you.

About the Manulife Bank Survey

Now in its 13th year, the Manulife Bank of Canada poll surveyed 2,001 Canadians in all provinces between ages 20 and 69 with household income of more than $40,000. For the past six years, the survey has been conducted online by Ipsos and the current survey took place between October 5 and 11, 2023. National results were weighted by gender, age, region, and education. This survey has a credibility interval of +/- 2.5 per cent 19 times out of 20, of what the results would have been had all Canadian adults between the ages of 20 and 69 been surveyed.