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Mortgage Broker News | 08 Dec 2015, 08:15 AM Agree 0
Mortgages fueled Canada’s household credit growth for the month of October, according to a report by the Royal Bank
  • anonymous | 08 Dec 2015, 09:28 AM Agree 0
    I do not believe this ascertion. If you look at Canadian's credit bureaus regularly it is not mortgages but high limit unsecured lines of credit given out to banks like candy to children on Halloween, which effectively as a result of the 3% rules traps clients and limits there financial options. At least with long term mortgages you see a steady reduction in indebtedness as opposed to the never never plan of a interest or low payment line of credit.
  • keith | 08 Dec 2015, 12:26 PM Agree 0
    @anonymous

    The 3% rule, if the consumer pays attention to it, means that they actually have a hope of paying off the debt. IF all they do is make the minimum payment... the debt will never be paid off. Your assertion is, sorry to say, obviously not based on historical credit utilization nor on sound facts. Most home owners have lines of credit, secured or otherwise, and using your home as an atm is not sound fiscal planning anymore than using credit cards are.

    The issue is that household savings continue to be very low when compared to historical averages. The average household in Canada only has enough savings to tide them over for 2-4 months in the event of loss of income. That is simply not enough money.

    The days of retiring debt free are gone, and that gives economists and government very valid concerns. What happens when the boomers start to die off with huge debt? It means that their children have little to no inheritance, insurance claims skyrocket putting pressure on the economy, etc etc etc.

    The tunnel vision of the brokerage community is at best scary.
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