Household debt to outpace income: TD

Household debt to outpace income: TD

When interest rates rise, 10 per cent of Canadian households could be in financial trouble, according to a TD Economics study.
 
TD chief economist Craig Alexander said household debt, which includes mortgages, has become excessive as Canadians get more accustomed to easy borrowing.
 
“One in 10 is a high ratio,” Alexander told CBC News. “It looks to us that Canadians’ personal finances have gotten stretched.”
 
Alexander also expects those debt levels to increase more rapidly than income growth.
 
The TD study said that even if the Bank of Canada’s overnight rate only rises to 3.5 per cent by 2013, family debt might still rise five per cent annually. That should be a concern, the report said, given its prediction that incomes will likely grow only by four per cent a year.
5 Comments
  • c oncerned 2010-10-23 5:07:03 AM
    If TD and Craig Alexander are so concerened about debt increasing so rapidly why are they signing up their clients with a collateral charge? So they can "refinance without incurring legals"? What a joke....TD looking so concerned here but the truth is they are enjoying this....the more debt Canadians have the more money they make! So come on everyone lets sign a collateral mortgage!
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  • RIGHT ON 2010-10-23 5:54:19 AM
    Well said on the last comment. Truly, who do they think they are?
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  • Bob 2010-10-25 11:49:12 PM
    Economist's try to predict what's happening in our economy-(which by the way is one of the best in the world today)and for years banks have been lending out money, which is exactly how they make more money.This is not rocket science.
    Canadians themselves must decide what they need,what they need to borrow and how far in debt to go.A collateral mortgage is a great way to borrow-you have good credit,you have equity in your biggest asset and if you really need,and can afford the payments-go and get a loan or a mortgage!!!
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