Tag Archives: financing

How much mortgage is too much?

You’ve probably heard over and over again that household debt in Canada is climbing to record levels.

And it’s probably not a surprise to you that mortgages due to the high cost of housing holds some blame there.

But did you know that the total amount of mortgage debt in Canada has nearly doubled in the last four years?

According to CAAMP the total national mortgage debt in 2008 was $664 billion. It now stands at a total of $1.2 trillion.

Over in the Vancouver Sun Barbara Yaffe sees this stat and seems to blame the little transaction fees for the high cost of housing.

But there’s a little four letter acronym conspicuously missing from her article: CMHC.

That would be the Canadian Mortgage and Housing Corporation, which has been flooding the market with insured mortgage money at a time of low interest rates.

So here’s the real question: Is Canadian mortgage debt so high because of our house prices, or are our house prices so high because of that mortgage debt?

Is financing getting tougher for the self employed?

It seems that more and more Canadians are self employed.

The self employed tend to have less steady income then full time employees and as a group it can be more difficult to get a mortgage or refinancing.

As a self-employed website developer who had recently restructured his business, Greg Schmidt knew that refinancing his mortgage wasn’t going to be a piece of cake.

“I had a little bit of a line of credit built up from shifting the focus of the business and my car lease had come up for being bought out, so I needed money to take care of that,” said Mr. Schmidt, a single 42-year-old who owns a home in Toronto that includes an apartment for income. “It turned out the best way to go was to do a new mortgage, increase the amount of the old one and take care of those costs.”

However, when he approached his bank, he was told “the numbers didn’t work for them.”

Read the full article in the Globe and Mail.