Mortgage Renewal: Brace for Payment Shock
After nine years of this NDP-Liberal government, mortgages have become unaffordable. Reckless spending has driven up the cost of everything, forcing the Bank of Canada to slam on the brakes with the fastest increase in interest rates in Canadian history.
Sky-high interest rates will create misery for Canadians with mortgages. This was confirmed by Office of the Superintendent of Financial Institutions (OSFI) who reported that many Canadians will face a payment shock when they renew their mortgages at much higher rates over the next two years. This could affect as many as 76 percent of Canadians with outstanding mortgages.
As a direct consequence of this, the OSFI is expecting that these payment increases will lead to more Canadians defaulting on their mortgage. As the OSFI described in their report, “mortgage payments are taking up a larger part of some households’ income, leading to increases in the number of borrowers not being able to make payments on other loans and debts.”
This is especially concerning as Desjardins has reported that Canadian households are the most indebted in the G7 by a “wide margin.” Household credit market debt has reached a staggering $2.9 trillion, meaning that household debt was 178.7 percent of the disposable income of Canadians at the end of last year.
Common Sense Conservatives have consistently warned the Government that their out-of-control spending is forcing the Bank of Canada to keep interest rates higher for longer. Despite this, the NDP-Liberal government decided to add $61 billion of new spending in their new budget with Canada now spending more on paying interest than on health transfers.
For this reason, the Governor of the Bank of Canada, Tiff Macklem, confirmed that Liberal spending was “not helpful” in his efforts to bring down interest rates.
Only Common Sense Conservatives will cap the spending and lower interest rates for Canadians. This Prime Minister just isn’t worth the cost.
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