Attention: Household Debt!

A great article from First National:


Attention on household debt

A new survey by one of Canada’s big banks is refocusing attention on household debt. The survey suggests more Canadians are in debt and they’re taking longer to pay if off. Eighty-three percent of respondents said they are in debt, compared to 74% a year ago. The average repayment is about $985 a month, down from more than $1,100. The numbers might indicate that more Canadians are having trouble making ends meet. More likely (and perhaps more ominously) it means Canadians are taking a blitheful view that interest rates aren’t going to increase and are taking their time paying what they owe. Encouragingly the biggest source of debt reported in the survey is mortgages and the Canadian real estate market is performing well. But mortgage rates are on the rise – up nearly half-a-point in recent months. For those who are buying or renewing it means more rigorous mortgage “stress testing”. For everyone else it means shaking off the wishful thinking and bearing down on debt.