Riley noted that respondents said they included their gas, entertainment, and savings, so “it was interesting to see that so many didn’t include their mortgage payment!”
IG Wealth Management and Pollara Strategic Insights surveyed 1,590 adult Canadians online in the summer, and the results showed that more Canadians could improve their cashflow management by including their mortgage payments in their monthly budgeting.
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Riley said that clients not reporting this major expense in the budget means that advisors are only working with part of their clients’ financial picture when doing their financial planning. A budget must include all major expenses to be effective and create the basis for an accurate financial plan.
That’s more of a concern now that interest rates are climbing and could impact many clients’ mortgage payments and other expenditures. In the study, 56% of mortgage holders were already concerned about whether they could make their mortgage payments if the interest rates continue to rise. In fact, 60% felt they would have to reduce their expenses, giving rising interest rates and costs, and 43% were not sure how they would make ends meet on a monthly basis.
