According to numbers released by the Canadian Mortgage and Housing Corporation (CMHC), the average Canadian homeowner with a CMHC-backed mortgage now pays 26% of their monthly household income on their mortgage payment.
This is up from 25% in 2013, and while a 1% gain over two years might now seem alarming, it does point to a continuing trend in Canadian mortgages and home ownership.
Canadian Housing Costs are Likely to Continue Growing
It’s no secret, and probably no surprise, that home prices are rising across Canada. In some areas, this rise has been incredibly rapid amidst the low rates available on mortgages for both first-time Canadian home buyers, repeat buyers, and investors both foreign and domestic who are getting on board early with what they see as a long term driver of value and returns.
In the rest of the nation, the increase in home prices has been more modest but is still readily apparent, and the end result is the same: home prices are going up and Canadian incomes aren’t keeping pace. While part of rising home prices across Canada can be attributed to the historically low rates for Canadian mortgages, most economic signs point towards a long term trend in housing cost increases that outpace income gains.
How Locking in a Mortgage Now Can Help
Housing prices in most of Canada are going nowhere but up. Canadian mortgage rates truly cannot get much if any lower than their already record-breaking rock-bottom levels. Housing costs are only going to get more expensive, so the sooner you can purchase or refinance your home and lock in your mortgage, the better.