Several factors have made Canadians too comfortable with debt - years of low interest rates and rising house prices.


According to the latest numbers from the Bank of Canada, Canadians now owe $2.16 trillion in mortgage, credit card and other consumer debt—an 80% jump from 2008, and an amount that now exceeds the value of the entire Canadian economy. That means that today, the average Canadian owes about $1.70 for each $1.00 earned annually, after taxes. This is a record high and up about 100% from 20 years ago.

Excluding mortgages, Canadians now carry an average of $22,800 each in debt, with those between the ages of 46 and 55 having the highest average debt loads at $34,100. This age group is seeing the largest increase in debt year-over-year.

Of the nine top cities listed, Fort McMurray, Alberta had the highest average debt levels at $37,800 and Montreal has the lowest, with average debt loads at $17,300.

The History Of Canadian Mortgage Debt Over The Years

Older Canadians may remember how in the span of seven weeks in 1981, the bank rate was hiked seven times - eventually reaching 18.75% and eventually topping out at 21%.

However, there is now an entire generation that has entered adulthood, the workforce and the homebuying phase of life that have never known anything over 5% interest rates. With the number of debt households take on today, rates don’t have to rise nearly as much as in 1981 to have a disastrous impact.

Steps To Successfully Managing Your Mortgage Debt

  1. Create a budget - Track and review where your money goes. Those lattes and lunches can add up very quickly. Make a spending plan and stick to it.
  2. Check your credit score - It can be surprising what you find. If your credit is good, you may qualify for lower interest rates. If it’s not, you may need to develop a plan to improve your score.
  3. Make your dollar stretch - Learn to live on less. Put any extra money towards paying off your debt as quickly as possible.

Call today

To find out more about how our mortgage loan insurance policies can help save you money, contact our licensed agents today at 1-866-587-3366 or fill in our online contact form.

 

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