Own A Home? It’s A ‘Ticking Time Bomb’
This is required reading for homeowners, with or without a mortgage. The great reckoning is expected in two or three years:
Economists at Desjardins Capital Markets have issued a dark warning about how much more damage high interest rates could inflict on the mortgage and housing market: You ain’t see nothin’ yet.
This week, Royce Mendes and Tiago Figueiredo published a report labelling Canada’s mortgage debt “a ticking time bomb.” The detonation time, they argued, is still “a couple of years in the future.”
Canadians Worried About Mortgages: POLL
… The bulk of mortgages taken out during the COVID-19 pandemic, when rates were at their bottom and house prices soared, were for five-year terms. For those loans, renewal crunch time hits in 2025 and 2026. The Desjardins economists forecast that on fixed-rate mortgages, first-time homebuyers (who make up about half of all new mortgages each year) will face 15-per-cent increases in their monthly payments.
To read the full story in the Globe and Mail, click here.
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By framing implied criticism of Bank of Canada interest rate policy in terms of a homeowner problem, the Globe has skillfully omitted that this is a business problem too. Developers, like our OSEG partners will be refinancing will they not? This couldn’t be the reason for the rush to approve Lansdowne 2.0 could it? Do you see the City coming to the rescue of homeowners at refinancing time?