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.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
If mortgage repayments were to rise by $500 a month it would be too much for one in six Canadian homeowners.