Canadians may think they know more about the mortgage process than they actually do according to a new survey.
More than three quarters of those polled by LowestRates.ca said they were financially literate but almost 60 per cent failed to make the grade in a test of 15 questions.
The true or false questions with the highest failure rates included:
- FALSE: A mortgage term refers to the length of time you need to pay off your mortgage. (70 per cent provided the wrong answer)
- TRUE: You must pay for government insurance on mortgages when you have a down payment of less than 20 per cent, unless the home is worth $1 million or more. (67 per cent provided the wrong answer)
- FALSE: A car that is more expensive always costs more to insure than a cheaper car. (67 per cent provided the wrong answer).
"Financial literacy continues to be a hot topic and we know it needs to improve, but Canadians need to be honest with themselves about what they don't understand," says Justin Thouin, CEO, LowestRates.ca. "For example, the area we found Canadians were the weakest in was mortgages. Considering that buying a home is probably the largest investment of your life, this is a serious problem."
It seems that financial knowledge comes with age as 52 per cent of Baby Boomers passed the test, 45 per cent of Gen-Xers and 33 per cent of Millennials.
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