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Mortgage Defaults are Remaining Stable

Stable rates

Aside from the province of Alberta, the numbers of the mortgage defaults or those payment misses remained stable for the past 2 years. The average rate for Canadian mortgage arrear has remained steady to as close as 0.3%. Within a span of 5 years, the mortgage rate has actually stayed flat throughout the period and it only suggests that there is a close correlation in between the default rate as well as the interest rate.

 

If the said relationship between the 2 really exists, then it is projected that the increasing in mortgage rate will be pushing the arrears up. This will be shown on the balance sheets of the lender. As for the result due to the loss, there is no possibility that the interest rates will be going up quickly. However, the loss as well as the higher risk from the arrears may possibly raise the standards for lending.

 

There are people asking whether the rates can have the possibility of going up, but the only answer that anyone in the real estate field could provide as an answer is maybe soon.

 

Between the rate of Canadian core inflation and USD-CAD is a closely inverse relationship. When the Canadian dollar continues to weaken, this will cause the inflation rate to be pushed higher than how it is now and the target rate of BoC will then follow. Certain rates have close relation with each other and once the other half is affected, expect that the other half will follow.

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