Canadian Mortgages debt tops $1 trillion first time in the history

Nov. 8, 2010 - PRLog -- Toronto | www.WorldWealthBuilders.com |

A latest report says Canadian mortgage debt has spiked to over $1 trillion, largely as a result of high home prices and low interest rates.

"Affordability, low interest rates and booming Canadian Real Estate market have increased the appetite for Canadians to take advantage of this market" says Navtaj Chandhoke, founder, Canadian Professional Real Estate investors group (PREIG) Canada.” Even though there are certain provinces which are already feeling the pain of carrying heavy duty of the Mortgages debt due to after effects of recession, US market and low prices of Oil. Canada as whole is very stable market."

Roughly one in five Canadian homeowners took equity out of their homes in 2010, with the average withdrawal being $46,000.Over that time, Canadians total mortgage debt has increased by 194 per cent.

The Canadian Association of Mortgage Professionals says in its annual report that the value of outstanding mortgages is now 7.6 per cent higher than it was last year.

The average price of a home sold in Canada hit $331,089 in September, the most recent data from the Canadian Real Estate Association shows. The report says higher prices have forced many Canadians to borrow heavily to finance home purchases.

Some 5.65 million Canadian homeowners have some sort of mortgage, and 3.75 million Canadian homeowners own their homes outright. Overall, home equity is at 72 per cent of the total value of housing in Canada. The average homeowner's mortgage interest is 4.22 per cent, a drop from 4.55 per cent a year earlier, the report found.

One in three mortgage holders in Canada have either increased their payments or made a lump sum payment on their mortgage in the past year.

The report also finds that  Canadian homeowners are comfortable with their level of mortgage debt and that the vast majority — about 84 per cent — say they could afford at least a $300 increase in their monthly mortgage payment.

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