credit and debt
BC AHEAD IN NOT FALLING BEHIND With interest and unemployment rates both near their historical lows, provincial housing markets continue to project sturdiness.
Housing markets in the United States have always differed from those here in Canada. For example, down there, borrowers can access 30-year fixed mortgage rates; here, we tend towards 5-year terms. In the past, US banks have handed out so-called NINJA loans (“no income, no job, no assets”); here, mortgage qualification rules have been much stricter. And finally, a key feature of US mortgages is that they are “non-recourse”, whereas up here we have “recourse” loans. This is an important feature because it means unlike in the US where homeowners can literally leave the keys in the
door and walk away from a home that is underwater, such a situation here in Canada would require a homeowner to make the lender whole. All of this is to say we have always had lower mortgage arrears rates in Canada, so the fact that they are still low today is not news in and of itself. However, BC’s 0.13% arrears rate is something to be proud of, as it’s ⅓below the national average of 0.19% and down from 0.17% one year ago. As far as this metric of housing is concerned, our market gets a clean bill of health.
BC’S RATE OF ARREARS IS MUSIC TO OUR EARS
0.7%
0.6%
0.50%
0.5%
0.46%
0.42%
0.4%
2021 national rate 0.19% from 0.25% in 2020
0.3%
0.27%
0.26%
0.23%
0.20%
0.2%
0.15%
0.13%
0.1%
0.08%
0.0%
ON
BC
PEI
QC
MB
NS
NB
AB
NL
SK
Q
Q
SOURCE: CMHC & EQUIFAX CANADA DATA: MORTGAGE DELINQUENCY RATE BY PROVINCE
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