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www. insidehalton.com | OAKVILLE BEAVER | Thursday, August 31, 2017 | 22 Canadians’ love affair with personal debt continues unabated uch can be learned about the prior- Me: of Canadians when you look at borrowing patterns. Also, much can be learned about the risks of personal debt. TransUnion is a credit monitoring firm. It released its Q2 2017 Canadian Industry Insights Report in August showing how Ca- nadians borrow. The numbers show the Canadian dream of homeownership continues. With regard to mortgages, Canadians owe more than ever. The report shows that as of the end of June, the average Canadian mortgage had just under $200,000 owing, an increase of about five per cent over the last year. Its interesting to note that the number of borrowers who have fallen behind on their mortgage payments has decreased. This is the third consecutive quarter of declining delinquencies — anything over 60 days for mortgages. Clearly home ownership is a priority. Canadians will borrow in order to own a house, and do what it takes to stay current with their mortgage pay yments. jis information underscores Canadians’ (Cc; coceco Taxes nat included A mination Patented. US. pat. nos. 1 ‘Aer © 2017 TWo Inc. All rights reserved Included). At the end of combi 12, 2017 remote peers, The content 168 of TWo boxes Internet sage limit channels 4 hi digtal channel Dollars & Sense Guest Contributor desire about home ownership. Unfortunately, desire is just part of the equation. Desire to own a home has to be combined with the ability to pay for it. If a mortgage holder wants to pay their mortgage but, for unforeseen circumstances, does not have the funds, then everything changes. The largest single risk for home owners who have a mortgage is interest rates. Interest rates have been historically low for so long that many borrowers don’t even con- sider that they can be significantly higher. The long-term track record of interest rates is that they rise and fall. Predicting future rates is somewhere between difficult and im- possible. If and when interest rates increase, the de- sire for a mortgage holder to make regular mortgage payments will be superseded by their lack of ability. The same mortgage that was manageable at current interest rates will be beyond the fi- nancial means of some as rates increase. In September 2016, TransUnion stated that close to a million Canadians would struggle with making increased repayments if the interest rate on their total debt, including mortgages, increased by even one percentage oint. If interest rates do increase and many find home ownership too expensive there will be more house sellers than buyers. House prices will decline. This will affect mortgage holders, mortgage lenders, home owners who do not have mort- gage debt, and the entire Canadian economy. Future interest rate increases are a signifi- cant financial risk for us all. — submitted by Peter Watson, of Peter Wat- son Investments. MBA, CFP®, R.EP, CIM, FCSI REDUCE REUSE RECYCLE ondominiums in Oakville for over 20 ye Management Condominium Management with Experience and Integrity Please call for your no-obligation complimentary proposal. 1-800-999-7419 www.wilsonblanchard.com