Mortgage borrowers are more likely to be financially responsible than those without a mortgage, according to a study by DUCA Impact Lab and Angus Reid.
Canadians are racking up debt fast, and the study found that nearly half of borrowers are struggling to save and build wealth due to their financial obligations. Around 37% of borrowers said they are avoiding their financial services representatives due to perceived pressures to manage their finances in a way they do not feel comfortable with or because they are being recommended products they do not understand.
"The findings of this study bring to light some important gaps in the current banking system which fail to serve the best interest of the average Canadian," said Doug Conick, president and CEO of DUCA Credit Union.
The story, however, is different for mortgage borrowers.
Those who have a mortgage are more likely to be wealthy, report a good credit score, and a better ability to manage their finances. In fact, over three in four mortgage borrowers are confident about their financial standing.
However, the study found that almost half of those without mortgages report poor personal finances. One in four of those without mortgages belongs to the millennial age group.
These findings are concerning, according to the study, given that 42% of millennial borrowers surveyed prefer minimal to no contact with their financial advisors. These millennials join a quarter of Canadian borrowers who do not trust the advice of their financial institution.
The study also surveyed lenders, with roughly half admitting not prioritizing their client's level of knowledge in their product recommendations. Also, 42% of Canadian lenders identify their institutions as sales-oriented as opposed to customer-driven.
"We remain acutely focused on raising awareness of and driving a conversation around the importance of a fair banking system and providing a level playing field for Canadians when it comes to addressing issues surrounding debt and accessing financial services more broadly," Conick said.