A new poll by BMO found that 16 per cent of respondents could not afford the additional cost of their home loan while 27 per cent would need to take a close look at household budgets to cope with the extra expense.
The mortgage lender is encouraging borrowers who may be finding budgets tight already to put a plan in place now rather than wait until interest rate hikes down the line.
The $500 figure is based on mortgage rates of 5.75 per cent (on a $300,000 home with a 25-year amortization), which is unlikely to happen anytime soon but not out of the question over the longer term.
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If mortgage repayments were to rise by $500 a month it would be too much for one in six Canadian homeowners.