A few reports came out this week, underscoring the knowledge gap between Canadian consumers and the state of their personal finances. An annual debt report released by BMO finds household debt levels continue to skyrocket, as consumers clamour for mortgages and cheap credit. Meanwhile, a study shows many TFSA investors still aren’t clear on their contribution rules.
INFOGRAPHIC INSIDE: The new StatsCan National Balance Sheet has been released and finds positive change in Canadian mortgage debt levels – finally some good news for Canadian credit carriers!
How will StatCan’s revised debt to income ratio numbers affect Canada’s mortgage market? Are borrowers increasingly vulnerable to rate hikes?
Canada’s debt to income ratio and subsequent household debt is far higher than previously thought, on par with those that sparked the US and UK economic downturn and housing market crisis.
CMHC is given permission to insure up to a limit of $600-billion. That threshold is slowly approaching and concerning some mortgage brokers and real estate experts. They say this could adversely affect smaller lenders and consumers in the short to medium term.
Up until a year ago I was just as financially illiterate as the next guy. My monthly bills were too high; I had bad credit card debt and virtually no savings. A year later, my savings have grown substantially, I have freed myself of nasty credit card debt and I have cut back on unnecessary monthly bills. And guess what? You can do it too. This week is Financial Literacy Week. Help yourself get financially ahead and take the pledge. I dare you!
Bank of Canada Governor Mark Carney is painting an increasingly bleak future for the Canadian housing market. Although soft in his chosen words his message at a recent speech to the Vancouver Board of Trade was clear, when rates go up, we are in trouble. Carney highlighted again that the single biggest investment most Canadians make is their home. It represents almost 40 percent of the average family’s total assets. The big problem, many Canadians are living in homes they won’t be able to afford once interest rates start to rise.
Canadian Personal Debt Levels have outgrown those of the U.S. Are you in debt danger? Read on to find out.