The majority of Canadian homeowners believe they are "smart spenders", according to a new Harris/Decima report commissioned by BMO Bank of Montreal. Respondents also say they want the flexibility to use credit in a responsible and timely manner so they don't miss out responding to challenges and opportunities.
The majority of homeowners feel they are cautious with their spending habits and a total of 26 per cent describe themselves as 'very disciplined'.
When asked to define 'smart spending' the majority surveyed describe it as spending within their budget and always getting the best bang for their buck. From a personal behaviour perspective, 84 per cent of "smart spenders" describe themselves as "bargain hunters" or looking for value, while more than 80 per cent say they do their research when making a major purchase.
"Homeowners' motivation to capitalize on long-term personal growth opportunities rather than impulse purchases, such as an expensive car or an exotic trip, is a clear demonstration of their 'smart spending' credentials," said Lynne Kilpatrick, Senior Vice President, BMO Bank of Montreal. "More than 41 per cent say they would use additional credit for home renovations and 34 per cent would invest in their retirement savings."
The survey shows three-quarters of homeowners have debt over and above their mortgage, with the average debt load at $29,400. Approximately 80 per cent say they would be very or somewhat confident managing large amounts of debt. This level of confidence can be partly attributed to the opinion that if used wisely, money can create money. However, half of respondents say they have missed out on past opportunities because of a lack of funds.
"Individuals need maximum flexibility to respond to unexpected contingencies and also opportunities," said Ms. Kilpatrick. "A home equity product such as BMO's Homeowner ReadiLine gives Canadians the choice and control to call the shots, reduce the cost of borrowing and it's there when you need it."
Regional Differences
- Using additional credit to invest in retirement is higher in Vancouver
than any other city where 45 per cent say they would use additional
credit to finance their retirement fund.
- In Vancouver and Calgary where house prices have sharply increased,
more than half of respondents say they missed out on an opportunity to
buy property due to a lack of funds. (51 per cent and 56 per cent
respectively).
- In Montreal, 63 per cent say they did not need to borrow and
64 per cent note they do not want to live beyond their means. In
addition, census metropolitan area (CMA) data show more Montrealers
consider themselves to be disciplined spenders.
- Homeowners in Regina are more likely to have three lines of credit
than any other region surveyed, and are the most likely to want a loan
that offers them total control over their spending. They are also the
most conservative investors in the country, preferring to hunt for
bargains instead of "spending money to make money."
- In Atlantic Canada, 72% of homeowners would use their line of credit
in an unexpected financial emergency
The Harris/Decima online poll was conducted from Feb. 15 to 26 and is based on a sample of 1,875 homeowners, aged 35-65 with at least 20 per cent home equity.