Looks like Canadians will need to take a serious view of the
mounting household debt. The average Canadian household debt now stands at
$100,000, according to a latest report.
Compared to a 93% debt to income ratio in 1990, the present rate stands at a
whopping 150%.
A decline in savings rate to 4.2%, from 13% in 1990, has
made matters worse. This means that average savings per household is just $2500
compared to the $8000 in 1990.
The news is also bleak as far as mortgage payments are
concerned, with Canadians lagging behind in payments by an average of 3 months.
With tough mortgage rules taking effect from March 18, home
sales have seen a big jump. While the government is trying to introduce
measures to curb household debt, Canadians taking out mortgages or home equity loans
should plan their finances better and make timely payments.On a positive note, there was a drop in credit card debt in
2010’s fourth quarter.
The average debt on credit cards in the last quarter
declined by 2.7% from 2009. This came as a surprise considering the slew of
holiday shopping in the fourth quarter.
Many Canadians opted for credit lines, with a year on year
increase of 8.8%. It was seen that Canadians used lines of credit to pay down
their credit card balance. The fact that such credit lines are offered at
attractive rates of interest have made them a popular financing form.
