Houses prices in Canada have been rising. We are all well versed in that story.
During the first half of this year house prices went on a historic high. That left a record number of Canadian’s stretched well beyond their means trying to afford their mortgages.
Knowing that numbers of unemployment are at a record high, interest rates are at a record low, and Canadian’s are more in debt than ever how many of those borrowers will be in danger of missing their mortgage payments? While that number is elusive, new survey data suggest it may be less than thought.
A BNN Bloomberg article states this:
“About one in every 25 homeowners (four percent) spend more than two-thirds of their household after-tax income on housing costs, according to the survey. That represents approximately one home per residential block nationwide.”
It goes on to state:
“Among those who know how much more they can afford each month, only three in 10 (29.5 percent) said they could afford at least a $500 increase in their monthly payments. Fortunately, given the average mortgage size, a $500 per month jump in payments implies a roughly 400-basis-point surge in interest rates.”