Source: RateSuperMarket.ca
Last week, the mortgage qualifying rate of Bank of Canada stayed on the same 5.29 per cent level as the week before last week. In the closed mortgage market of Alberta, the fixed mortgage rates slightly increased for the 3 and 10 years rate. The 5 year fixed mortgage rate increase was more significant; it climbed from 2.99 per cent to 3.24 per cent. The variable rates for 3 years stayed the same and the 5 year rates increased from 2.75 per cent to 2.90 per cent.
The Bank of Canada called for help to deal with the situation with the indebted aging population.
According to the annual consumer lending survey done by PwC, 58 per cent of the retired respondents stated that they carry some kind of debt. 40 per cent out of that number stated that their debt is less than $100,000 and 15 per cent stated that their debt is between $100,000 and $250,000.
On the other hand, the report states that Canadians in general are becoming more aware about their high levels of debt. There are observable changes in the respondents’ attitudes towards new loans. Many Canadians are now moving towards financial responsibility and reported that they will focus on paying-off their debts.
Canadians were perhaps scared by the Bank of Canada governor Mark Carney’s statement that over-indebted Canadians present the greatest domestic threat to our economy. In a similar way, Queen’s University finance professor Louis Gagnon stated, “If we keep going this way and there’s an interest rate shock, the larger the shock the larger the number of homeowners that will be put in a tight spot and have to sell their homes in a market that has become illiquid because other people are doing the same thing.”
Even though we can observe some changes in the behaviour of Canadians, the problem with mortgages won´t be solved by the population, so the government should apply a higher amount of regulation into the mortgage market.
