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65% of Quebec homeowners would not be concerned should their mortgage rate increase - Clearfacts.ca – CROP* survey: The reflection of Quebecers’ financial position

Montreal, 15 March 2011 -

The results of the Clearfacts.ca* survey conducted by the polling firm CROP on savings and investment continue to surprise. In Quebec in 2010, while the majority of homeowners (66%) had a mortgage on their main residence, 27% stated that they are "not at all" concerned and 38% were “not very often” concerned that their mortgage payments might increase.

Young couples (53% "not at all" concerned ) and senior citizens (52% “not at all concerned”) are those whose minds seem to be most at ease. However, note that the majority of home owners (61%) have a fixed-rate mortgage, which protects them in the short-term against interest rate fluctuations.

Nevertheless, a deeper investigation into homeowners’ ability to repay their mortgages reveals a more disquieting portrait of the situation. If their mortgage payments were to increase by $100 per month (equivalent to a rate increase of 1% on a mortgage of $200,000* over a 25-year period at 4%), only half of homeowners (54%) state that they could “easily” continue making their mortgage payments, while 6% state that they would not be able to.

Single parent families are particularly vulnerable. 14% of them would not be able to handle an increase of $100 per month. Luckily, the majority of them (75%) are protected for the moment because most of them have a fixed-rate mortgage.

Young homeowners are also at risk, but for a very different reason: most of them have a long-term mortgage (47% of 18-34 year olds have mortgages of 30 years or more vs. only 17% among other homeowners), which leads us to believe that they probably don’t have enough money to borrow over a shorter period. Are young people too hasty when planning to buy their first house?

To find out more about Quebecers' housing preferences, view the third component of the Clearfacts.ca/CROP poll in "Quebecers reluctant to pay more for a mortgage" at www.clearfacts.ca.

*Methodology: Data were collected online from December 3 to 23, 2010 by web panels. In all, 1,814 questionnaires were completed. The results were weighted to reflect the distribution of Quebec's adult population by sex, age, region, language (in the Montreal area) and household size. Given the non-probability online sampling, the margin of error calculation does not apply.

About clearfacts.ca
Clearfacts.ca is an initiative of National Bank Financial Group. Its primary goal is to contribute to the financial education of Canadians. The site does not have any commercial intentions and the content presented is always neutral and credible. The role of clearfacts.ca is to help its readers make enlightened decisions that will contribute to their financial health.

About National Bank of Canada
National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has over $152 billion in assets and, together with its subsidiaries, employs 18,407 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website at www.nbc.ca. To access National Bank Financial Group’s financial education portal, visit www.clearfacts.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives.):

Joan Beauchamp
Senior Advisor – Public Relations
National Bank Financial Group
Tel.: 514-394-6500