Finance Minister Jim Flaherty this morning announced some stricter rules for Canadians to get mortgages.
He is probably trying to prevent situations leading to headlines like this:
The Vanier Institute of the Family also released today its annual assessment of family finances in Canada suggesting we are more in debt than ever before and defaulting on mortgages and credit card debt more often.
But we have to keep this all in perspective. The Canadian Bankers Association releases monthly statistics on mortgages in arrears. They are mortgages provided by seven mortgage lenders in the country - Bank of Montreal, Royal Bank, TD Bank, CIBC, ScotiaBank, National Bank of Canada, Manulife Bank and HSBC Bank of Canada. So it doesn't include all mortgages but would reflect a majority of them.
The most recent statistics available, for November 2009, showed in Canada 0.44 per cent of mortgages offered by those seven lenders are in arrears meaning they are at least three months behind in payments. It totals 17,747 mortgages out of the 3, 992, 985 mortgages in place.
That is up from 0.31 per cent in November 2008 (12,048 in arrears) and 0.26 per cent in November 2007 (9,862 in arrears).
So the number has definitely risen in the last two years, and 17,747 Canadian families behind on their mortgage payments isn't something to sneeze at. But it still suggests the vast majority of Canadians are doing okay when it comes to paying for their homes.
It's also not the worst it has ever been. That distinction goes to the months of January 1997 and February 1992, when 0.65 per cent of mortgages were in arrears.
Manitoba, where economists have consistently said the recession had the least impact, has the second lowest percentage of mortgages in arrears in the country at 0.29 per cent. Saskatchewan was the lowest at 0.27 per cent. Manitoba's percentage is up from 0.2 per cent in November 2008 and 0.19 per cent in November 2007.
There were 317 mortgages in arrears in Manitoba in November.
What else can I glean from these stats? Well, nearly three times as many Canadians have a mortgage now as they did 20 years ago. (1.4 million in January 1990 compared to four million in November 2009).
Alberta's economy fared the worst for homeowners anyway as mortgages in arrears went from 0.17 per cent in November 2007 (the second lowest in the country) to 0.72 per in November 2009 (the highest in the country.)
In Alberta the number of mortgages went up six per cent in two years and the number of people in default went up 352 per cent.