Canadian Mortgages Exceed $1T

The question is what will happen when interest rates rise or people lose their jobs.

The Canadian Association of Mortgage Professionals says in its annual report that there were $1,008,000,000,000 in mortgages outstanding at the end of August.

This represents a gain of  7.6% in one year and 194% over the past 15 years.

"While mortgage approvals slipped through the recession, a boom in lending has followed as the housing market recovered and buyers rushed into the market. After a frenzy of buying drove average prices to an all-time high of $346,881 in May, things have cooled slightly with prices now at year-ago levels near $331,000."

The association surveyed Canadians and asked at what point they would be in trouble if interest rates were to rise. The average amount of room is $1,056 per month on top of their current costs..

“There is a sizable minority, about 350,000 out of 5.65 million, or about 6 per cent, who would be challenged by rate rises of less than 1 per cent, and a further 225,000 (5 per cent) have thresholds in the range of 1.00 per cent to 1.49 per cent. However, most of these have fixed-rate mortgages: by the time their mortgages are due for renewal, time will have increased their financial capacity and reduced the amount of mortgage debt being financed. There are about 100,000 borrowers who are susceptible to short-term moves of interest rates, which is a quite small share (less than 2 per cent) of the 5.65 million mortgage holders in Canada.”