$500 would push 16% of homeowners into default

A recent Bank of Montreal poll finds that approximately 1 in 6 Canadian homeowners would be pushed into default if payments rose $500.

According to the bank, 16 per cent of respondents said they would not be able to afford such an increase, while more than a quarter, or roughly 27 per cent, would need to review their budget.

Another 26 per cent said they would be concerned, but could probably handle it.

Such an increase would be generated in the case of a three percentage point hike in interest rates — from 2.75 per cent to 5.75 per cent — on a $300,000 mortgage with a 25-year amortization period.

Given that interest rates are likely to increase in the foreseeable future, the bank said there was no better time to put together a detailed debt management plan.

Read the full article here.

Sort by:   newest | oldest | most voted
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

which is why rates aren’t going up.

bullwhip29
Guest
bullwhip29

and why 40-yr mortgages and other less stringent mortgage rules will be making a come back in the not too distant future (seeing as significnatly higher wages and/or lower prices ain’t gonna sit too well with employers, the RE cartel and the folks running the show in ottawa).

VanRant
Member
VanRant

@BBB
and because rates did not go up, the subprime and Derivatives bubble has more than double that of 2007. When these babies pop and it will be soon… its gonna be worst than 2007.

bullwhip29
Guest
bullwhip29

cont’d…
unless i am reading this wrong, more than 50% of cdn homeowners would fall somewhere between “default” and “concerned” on the financial comfort scale if payments rose by $500. and you can forget about $300k mortgages in this town. try $500k, $750k and more. obviously it would take far less than a 3% rate hike to push those already bloated payments up by $500. in this neck of the woods, a seemingly minor increase of 1% would hit many like a ton of bricks

bullwhip29
Guest
bullwhip29
Vancouver unveils $200-million plan to remove Georgia, Dunsmuir viaducts http://www.vancouversun.com/vancouver+unveils+million+plan+remove+georgia+dunsmuir+viaducts/11418320/story.html “…it’s crucial to tear down the viaducts now, while the land under them remains undeveloped.” “I can’t think of a more green, non-partisan thing to do,” >>>it is absolutely nauseating how city officials beat around the bush in a sad attempt to justify all this. go ahead, sprinkle a few parks, bike lanes, charging stations and “green” space in with all the new shiny highrises that will undoubtedly sprout up in the coming years and be done with it. anyone with half a brain could see this coming from a mile away. to those that missed out on what was supposed to be the last and final chance to “get in” on the opportunity of lifetime to buy pseudo-waterfront RE in Vanc, well, as luck would have it, you’ll be… Read more »
realist
Member
realist

@3 VanRant
“When these babies pop and it will be soon… its gonna be worst than 2007.”

Indebtedness is greater than in 2007, so it is reasonable to expect that in the next credit contraction, the outcome will be worse. A pressing question is: worse for whom? Last time there were bail-outs, next time there will be bail-outs and bail-ins.

bullwhip29
Guest
bullwhip29

@ #6

this is why so many have gone with this approach…(you cant lose anything that was never yours to begin with)
https://www.youtube.com/watch?v=r0HX4a5P8eE

space889
Guest
space889
Given the Fed is now pretty much on hold to possibly 2017 and BoC still want to drop rates, I wouldn’t really worry too much about interest rate increases, unless there is a big blow up in bond market. I think we are very likely to go through the Japan’s 2 decades of low interest rates. As well, we are going about 7 years without a major recession, almost unprecedent. So we are a lot closer to a recession than an economic expansion / boom. It is very unlikely for any central bank to raise interest rate into a recession, even if that is the right thing to do. I think the best cure for current economic mess is to raise interest rate at least above inflation and allow defaults. Yeah, it’s gonna to hurt big time but it’s a… Read more »
Oracle
Guest
Oracle

I C B C stats show that approx 2200 net new plates (cars) are insured in Metro Vancouver each month.

Dont rely on other stats for population. It’s the stats that are hidden from you that are most important.

Ulsterman
Member

Vanrant: When these babies pop and it will be soon… its gonna be worst than 2007

I long ago gave up calling for the end of bubbles. It’s as much a fool’s errand as those who claim prices will rises forever or interest rates will stay low forever.

It isn’t crazy to say it could last another 10 years. Who knows? Nothing makes sense anymore.

Oracle
Guest
Oracle

Debt is a zero sum game. Someone gets $$$$ when another goes into debt. Bears only looking at one side.

In a globalized world, the best areas of the best cities will get bought up.

That simple.

Canada: Vancouver, Tornto
Australia: Sydney, Melbourne
New Zealand: Auckland
England: London
US: San Fran, LA, San Diego, New York, Miami

These are the major english speaking countries.

paulb
Member

Week to date:

New
492
Sold
353

TI:11381

http://www.paulboenisch.com

bullwhip29
Guest
bullwhip29

Bloomberg: Rich Chinese facing backlash in Vancouver — North America’s costliest city
http://www.bloomberg.com/news/articles/2015-10-06/in-north-america-s-costliest-city-rich-chinese-face-backlash

Best place on meth
Member
Best place on meth

@13

I’m all for a heaping helping of backlash against the mainlanders, but I think it needs to be supplemented with a good amount of frontlash and a maybe a wee bit of sidelash as well.

For the sake of balance they need to be lashed from many different angles and directions.

Oracle
Guest
Oracle

Good grief. Getting downvoted.

When Garth started his blog, Vancouver Westside detached just broke the $1 Million barrier.

Now they are $2.3 Million. And he’s calling for a correction and not a crash.

Think about who’s drinking the Grape juice.

vangrl
Member
vangrl
“A Beijing-based private equity manager who bought a $2.3-million home in the hot Vancouver real estate market said he did that while earning just $19,000 a year. He also wired nearly $2-million to his family in Canada during the same period. Jing Sun is among several foreign investors who bought property in Canada in recent years, but kept the extent of their wealth out of view of the tax authorities and the courts, a Globe and Mail investigation has found. The Globe’s findings come amid a controversy in Vancouver, where many blame foreign buyers for soaring house prices that have made a single-family home unattainable for some long-time residents. The Urban Development Institute will tackle the topic for the first time in a sold-out public forum on Wednesday in Vancouver…. “They love to take advantage of Canadian tax law …… Read more »
right-or-wrong
Guest
right-or-wrong

Wow- vangrl

Wake up CRA you dumb silent fools and do something!!

Shut It Down Already
Guest
Shut It Down Already

“And he’s calling for a correction and not a crash.”

You mean he revised his predictions when they turned out to be wrong? Can’t believe Garth is getting slated for taking what’s basically the logical position. The alternative is steadfastly believing in a future outcome regardless of new information received – i.e. “Faith”.

Some posters here could surely learn a thing or two from Garth.

Best place on meth
Member
Best place on meth

Nice find vangrl.

These scumbags are having a great time fucking us over by the looks of it.

Best place on meth
Member
Best place on meth

@18

I upvoted you purely by accident. My screen was having a moment.

realist
Member
realist

@11 Oracle

“Debt is a zero sum game. Someone gets $$$$ when another goes into debt. Bears only looking at one side.”

Quite so. It is only banks and other such lenders that can list mortgages as “assets” on their balance sheet. And they cannot have too many of them, especially if the risky ones are insured by CMHC. The arrangement is, in all but name, a license to print money…again, actually, as the chartered banks were forced to give up issuing their own banknotes in 1944.

Shut It Down Already
Guest
Shut It Down Already

Its not illegal to be wealthy and have a low income. It’s not even an indication of past illegalities. It’s nonsensical to compare wealth (a product of past income) with present income. It’d be like saying that the gas tank must be full because the current speed of the vehicle is low.

It’s also quite possible to have a low income and easily cover a high rate of expenses, at least in the short term – by liquidating assets (potentially at a loss to avoid taxes payable).

It’s not as simple as comparing two numbers at a single moment in time.

Perhaps the G&M investigator needs the same basic schooling?

vangrl
Member
vangrl

#22

yes you’re right, all the examples in the Globe and mail article seemed entirely on the up and up.

Especially this one..

“When millionaire Xiong Hu Li’s wife divorced him in 2013, he ignored court orders to produce financial records, including tax returns. Instead, court records say, he claimed that all the money invested in Vancouver while he was in China came from his parents.

His wife, Rong Yao, had a $6-million Vancouver home, a condo, a Porsche and an Audi registered in her name. She testified at one point she owned 16 properties in B.C., until her husband had them transferred into his mother’s name.”

Are those fraudulent passport holders still here?

right-or-wrong
Guest
right-or-wrong

@ 22

“Its not illegal to be wealthy and have a low income”

Are you intentionally trying to deceive everyone. First the argument was there was no HAm ‘prove it’, now that even the MSM is saying their is money laundering and tax evasion going on, up pops dink-head shut it down to say…it is quite reasonable to have a net worth of $10, 20 + M and only earn $19K..it isn’t necessarily tax evasion. idiot.

yeah that’s what made them so rich, making 0.1% return on their money. You are full of it.

BTW for the rest- big drop in apartment averages and the first SFH drop in a long time!!

http://www.yattermatters.com/2015/09/vancouver-did-it-again/

http://www.yattermatters.com/2015/10/is-the-vancouver-market-out-of-breath/

right-or-wrong
Guest
right-or-wrong

“16 properties in B.C., until her husband had them transferred into his mother’s name.”

We are so screwed, it isn’t funny.

wpDiscuz