Paul Martin commentary
Canadians have survived the wave of mortgage renewals that followed the return of higher interest rates.
The country went for more than a decade with low to very low interest rates for mortgages but then, after COVID, there were fears that many would not be able to sustain renewals that would attract much higher interest rates. But those fears are now behind us, according to a report by the economists at TD Bank.
They said they have been answering questions for two years on whether Canadians would be able to cope with the higher rates. They say we now have the answer: they did.
They point to the fact that Canadians are now spending less on housing as a percentage of their income than we were three years ago.
There are two reasons for this: first is our incomes have gone up. And gone up faster than in the past three years than the previous three. And second, longer amortizations have reduced monthly payments, freeing up more wiggle room in the average household budget.
