So here we go again.. More stats that show our personal debt levels aren’t out of control… That’s right, I said ‘aren’t’ out of control. Equifax Canada says our defaults are at record low levels and we are paying off our debts faster. This doesn’t come as any surprise to me. Anyone that’s followed my posts knows that I have questioned all the popular articles telling us we are not managing our debts responsibly.
You’ve seen the reports… ‘Personal debts at record high levels’…..’Personal Debt crisis’. We’ve been hammered with the same headlines for the past few years. I just wasn’t seeing this with my readers or my clients… I kept seeing consumers wanting to take advantage of these record low interest rates to invest or improve their homes (why is that a bad thing?). That’s not bad debt in my opinion… that’s good debt.. And now we have some stats to back up what I have experienced.
Equifax says that defaults greater than 90 days sits at an all time low of 1.19%. Keep in mind, this is for non-mortgage debt. Mortgage debt is much lower….mortgage defaults greater than 90 days is 0.36% and trending lower according to the latest stats from CMHC. Equifax VP, Nadim Abdo, is quoted as saying there has been a steady decline since before 2007…. click here for the article at CBC.ca. These latest stats show we are just as responsible as ever. I do have concerns about how the new mortgage rules will affect us in the future. The govt thinks they need to make it harder to qualify for a mortgage yet they don’t have any restrictions or rules in place for the credit cards or personal loans… I’m concerned we could see consumers forced into these higher interest rate products. Banks will love earning the higher interest rates but this is bad for consumers.
Keep borrowing wisely…!
I welcome your comments and questions. Let me know how I can help.
Steve Garganis 416 224 0114 email@example.com