With the missed payments rate at a level more than three times higher than the national average, Saskatchewan is the worst in Canada when it comes to paying mortgages on time, according to the Canadian Bankers Association.
As of mid-year 2019, the province’s arrears rate stood at 0.86%, which was the highest nationwide. This translated to 1,118 mortgages in arrears for three or more months, out of the 130,106 total mortgages in Saskatchewan at the time.
To compare, the national average arrears rate in this period was 0.23%. The rate was just 0.14% in BC, 0.35% in Manitoba, and 0.5% in Alberta.
This is because many Saskatchewan home owners fell into the trap of excessive borrowing, University of Regina economics professor Jason Childs stated.
“If you are at your maximum carrying capacity for mortgage debt, but your wage stops rising and all of these other things go up, you can get yourself into trouble really fast,” Childs told CKOM.com.
The phenomenon stemmed from sustained low interest rates in the years after the 2008-09 financial crisis.
“That made borrowing really, really attractive. So it made people take on a lot of consumer debt and a lot of household debt that might not have otherwise,” Childs explained, adding that consumer demographics played a major role.
“Saskatchewan is relatively young, and comparison to British Columbia I think is kind of silly, because BC has a much older population. The older you are, the less likely you are to be taking on mortgage debt.”
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