https://youtu.be/q8MnNeEPVSY
Hard times ahead for a lot of people in Canada.
Much of Canada is set up so you can't just hand the keys back to the bank, so if you're underwater on your mortgage, you still have that mortgage. It's called a recourse loan vs. A non recourse loan. The bank has recourse to go after assets other than the home itself to be made whole.
Roughly 92% of mortgages have interest terms of 5 years or less. Typically the highest interest term that's practical is 10 years, after that you get to interest rates close to 10% so virtually nobody would have gone with those.
Interest rates started to rise around late 2021/early 2022, so a lot of people who took out massive mortgages (the average house price at the peak was $850,000 nationwide) at rates as low as less than 1%(!!!), and they'll reset to 6%, meaning that many mortgages will be resetting at many times the interest they had before.
Some mortgages are "insured", but you have to be careful because that doesn't mean the people are insured, it means the banks are insured. The people are still on the line for the mortgage they're supposed to pay (and if many mortgages fail, the taxpayer is on the line for it). Moreover, many of the most dangerous mortgages for the million dollar homes in Toronto or the 2 million dollar homes in Vancouver are not insured so that could be a major hit to the banking system if there aren't any more buyers and prices collapse because nobody can afford million dollar mortgages at 6%.
Meanwhile people need to demand insane salaries to be able to afford rent on a million dollar home, and often people are paying insane rents for horrible living conditions such as the person in the video trying to rent out underneath a bed for 900/mo.
Hard times ahead for a lot of people who made a lot of decisions everyone could have told them were stupid at the time but because the line was going up didn't look stupid for a while.
Hard times ahead for a lot of people in Canada.
Much of Canada is set up so you can't just hand the keys back to the bank, so if you're underwater on your mortgage, you still have that mortgage. It's called a recourse loan vs. A non recourse loan. The bank has recourse to go after assets other than the home itself to be made whole.
Roughly 92% of mortgages have interest terms of 5 years or less. Typically the highest interest term that's practical is 10 years, after that you get to interest rates close to 10% so virtually nobody would have gone with those.
Interest rates started to rise around late 2021/early 2022, so a lot of people who took out massive mortgages (the average house price at the peak was $850,000 nationwide) at rates as low as less than 1%(!!!), and they'll reset to 6%, meaning that many mortgages will be resetting at many times the interest they had before.
Some mortgages are "insured", but you have to be careful because that doesn't mean the people are insured, it means the banks are insured. The people are still on the line for the mortgage they're supposed to pay (and if many mortgages fail, the taxpayer is on the line for it). Moreover, many of the most dangerous mortgages for the million dollar homes in Toronto or the 2 million dollar homes in Vancouver are not insured so that could be a major hit to the banking system if there aren't any more buyers and prices collapse because nobody can afford million dollar mortgages at 6%.
Meanwhile people need to demand insane salaries to be able to afford rent on a million dollar home, and often people are paying insane rents for horrible living conditions such as the person in the video trying to rent out underneath a bed for 900/mo.
Hard times ahead for a lot of people who made a lot of decisions everyone could have told them were stupid at the time but because the line was going up didn't look stupid for a while.
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