I was interested to see that according to a new report from Statistics Canada that Canadians are deeper in debt than ever. According to the report, in the third quarter of 2009, both household net worth and household debt – mostly mortgages and consumer credit – increased.
This has resulted in a debt-to-income ratio of 145 per cent, which translates into $145 of debt for every $100 of income. That’s a scary thought. Although, not as scary as the debt-to-income ratio of 175 per cent in the United States.
The good news is that economists say that while personal debt is up, record low interest rates are keeping debt loads manageable. They also say that the debt-to-income ratio is expected to get better as the economy recovers.
While the Bank of Canada has pledged to keep the benchmark over-night lending rate at 0.25 per cent for the first half of 2010, they are urging home buyers to be prudent with the amount of mortgage debt they are carrying.
These certainly are in interesting times.
