Are our Personal Debts too high?
2 reports came out recently that received much air time on TV, Radio and Internet. Let’s look at these reports from the CBC…
1-The Certified General Accountants Association stated that the average Canadian’s debt is $41,740 per person….Apparently, it’s among the worst of the 20 most advanced countries in the world…
Well, let’s think about that for a moment ask some questions….
- I wonder how many people have borrowed to invest lately?
- $44k per person… is this a high number? I mean, what does a basket of goods cost in some of these other top 20 countries like, Greece, Hungary, Poland or the U.S.? Aren’t things more expensive in Canada?
- Canadians have a reputation of being conservative….are we borrowing wisely? Could it be that Canadians are taking advantage of these record low rates to borrow for rrsps, resp, stocks, real estate or other good investments?
2- The Canadian Association of Accredited Mortgage Professionals reported that 475,000 Canadians would be challenged if their mortgage rate went above 5.25% and 375,000 were already facing pressure to pay their bills.
- I spoke with a contact at Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial, the mortgage insurance companies that insured hi-ratio mortgages. There was no indication that Mortgage defaults were a problem.
- I have not seen any reports that show our Mortgage defaults are in trouble.
- Canada is near or has the lowest mortgage defaults among the top 20 countries.
- why would you take a 5 year fixed rate at 4.59% (today’s rate) when you could get 1.70% with a variable rate? How long will it take before variable rate reaches 5.25%? 2, 3, 4 years or more or never? Where will our debt load be at that time?
I think the confidence level in Canada is strong… let’s keep it that way… Spend and borrow wisely…
Steve Garganis View All
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.
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