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Never mind the two hundred bucks: Frostbacks in the major real-estate markets were so moist with house-lust that they bought absolutely as much house as they could possibly service the debt for, during a time of historically low interest rates.

As a proud American citizen you're saying, "What on earth could be wrong with that?" After all, aren't all Canadian mortgages government insured? Sure, the banks are insured--but not the debt-holders.

All Canadian mortgages re-set at least every five years. There's no such thing as a '25-year mortgage'. Sure, it's calculated as though it were being paid over 25 years, but the banks re-set your rates like clockwork.

Let's assume you were a moronic house-horny Frostback. You and your spousesicle made just enough money to pay the nut on a $1.5 million McMansion in Vancouver or Toronto. Then, as RE values rose, you did the Frozen North thing and got a Home Equity Line of Credit, because hey, presto! You're a paper millionaire!

Time passes. Now the Gummint changes mortgage rules because they're suddenly aware that most of the Canadian economy is being driven by speculative RE values and they're in pants-pissing territory, with house-moist Frostmonkeys carrying two trillion dollars in personal debt, or a buck seventy for every buck they earn. Woot!

And suddenly the USA decides inflation is going to be an issue and starts raising rates. Canada's Central Wankers have to raise rates in step or the Canadian Loonie plunges to zero in under a year. So they hike as gingerly as they can, but make no mistake, it's gonna be in lockstep with the Yankee dollarmongers. As rates rise, property values drop, sales slow and RE demand goes way down.

Endgame. Mr. and Mrs Iceballs from Toronto, Calgary or Vangoofer go in to Maple Syrup Savings and Loan to renew.

"Hmm," says The Nice Lady At The Bank, "Your house was originally mortgaged for 1.4 million with your dinky-ass little down payment. You've take out a $500,000 HELOC against the rising value of the home, and made no payments, so your total obligation to the bank is $1.9 million. Sadly, the market has dropped and your house is now worth only $1.1 million. In order for us to re-issue you a mortgage based on the value of the property, you must give us $800,000 right now, or get out of OUR house."

"By the way, your income is no longer enough to pay the new rate, which is 2% higher than previous. With the new government mortgage rule changes, you must also be able to service the debt you take on at a rate a full 2% higher than you're actually signing on for, in order to prevent nasty surprises when you renew in 5 years. So you only qualify for a mortgage of $700,000, and you're gonna need to cough up an extra $400,000 for a total of $1.2 million, or get the fuck out of our house."

Canada is so utterly, utterly screwed. They're going to hit the dirt like a K-T extinction event meteoroid.

Here endeth the lesson on how badly Canada has goofed up. I'll be taking questions in the lobby.



Edited 1 time(s). Last edit at 22-Jan-19 10:34 by Jock.

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Subject Views Written By Posted
Nearly half of Canadians come within $200 of bankruptcy: survey 865 Eddie Larry 21-Jan-19 16:26
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 224 drrayeye 21-Jan-19 20:19
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 195 Eddie Larry 21-Jan-19 20:55
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 188 drrayeye 22-Jan-19 03:36
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 183 Archaic 22-Jan-19 16:53
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 180 drrayeye 22-Jan-19 18:26
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 243 Eddie Larry 22-Jan-19 19:00
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 180 drrayeye 23-Jan-19 16:22
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 180 Eddie Larry 23-Jan-19 16:38
Canadian railways ration space as commodity congestion problems worsen 195 Eddie Larry 22-Jan-19 05:35
Fiscally, Canadians are idiots 216 Jock 22-Jan-19 09:02
Re: Fiscally, Canadians are idiots 196 Jock 22-Jan-19 09:06
Re: Fiscally, Canadians are idiots 189 Eddie Larry 22-Jan-19 16:19
within $200... 203 Racho 22-Jan-19 16:22
Re: within $200... 220 Eddie Larry 22-Jan-19 16:31
Higher taxes aren't good for anyone 179 Racho 24-Jan-19 17:14
Re: Higher taxes aren't good for anyone 165 WhoWeird 24-Jan-19 17:34
Re: Higher taxes aren't good for anyone 175 Racho 24-Jan-19 17:43
Re: Higher taxes aren't good for anyone 192 WhoWeird 24-Jan-19 17:54
Re: Higher taxes aren't good for anyone 175 Racho 24-Jan-19 19:20
Re: Higher taxes aren't good for anyone 162 WhoWeird 24-Jan-19 19:29
Re: Higher taxes aren't good for anyone 184 Racho 24-Jan-19 19:31
Re: Higher taxes aren't good for anyone 168 WhoWeird 24-Jan-19 19:33
Re: Higher taxes aren't good for anyone 180 Eddie Larry 24-Jan-19 20:39
Re: Higher taxes aren't good for anyone 179 Racho 25-Jan-19 06:15
Re: Higher taxes aren't good for anyone 169 Eddie Larry 25-Jan-19 15:33
Re: Fiscally, Canadians are idiots 183 PB Bytes 25-Jan-19 05:16
Re: Fiscally, Canadians are idiots 168 Jock 25-Jan-19 05:30
Re: Fiscally, Canadians are idiots 185 PB Bytes 25-Jan-19 05:40
Re: Fiscally, Canadians are idiots 187 Jock 25-Jan-19 07:24
Jock : idiot 190 PB Bytes 25-Jan-19 15:08
Re: Jock : idiot 194 Jock 25-Jan-19 18:05
Re: Jock : idiot 222 PB Bytes 25-Jan-19 19:14
Re: Jock : idiot 194 Jock 25-Jan-19 22:10
Re: Poster Boy : idiot 172 Jock 28-Jan-19 21:10
Re: Poster Boy : idiot 257 PB Bytes 29-Jan-19 02:05
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 193 Archaic 22-Jan-19 16:55
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 202 Eddie Larry 22-Jan-19 18:14
Trudeau on track to become highest spending PM outside of war or recession 187 Eddie Larry 23-Jan-19 18:28
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 234 Notinham 23-Jan-19 21:52
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 252 Eddie Larry 23-Jan-19 22:03
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 188 Jock 24-Jan-19 12:40
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 192 Eddie Larry 24-Jan-19 14:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 217 Notinham 24-Jan-19 15:14
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 187 Eddie Larry 24-Jan-19 15:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 246 Notinham 24-Jan-19 16:28
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 176 Eddie Larry 24-Jan-19 20:41
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 220 Notinham 25-Jan-19 01:11
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 187 Warwick 25-Jan-19 01:32
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 223 Notinham 25-Jan-19 03:41
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 188 PB Bytes 25-Jan-19 15:21
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 182 PB Bytes 25-Jan-19 16:14
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 171 Eddie Larry 25-Jan-19 17:54
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 194 PB Bytes 25-Jan-19 18:02
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 169 Jock 04-Feb-19 06:03
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 176 Eddie Larry 04-Feb-19 12:36
Re: Nearly half of Canadians come within $200 of bankruptcy: survey 192 Jock 05-Feb-19 07:28
economic reality 159 Warwick 05-Feb-19 19:48
Re: economic reality 157 Eddie Larry 05-Feb-19 23:48
Re: economic reality 164 Jock 06-Feb-19 03:10
Re: economic reality 166 Eddie Larry 06-Feb-19 04:08
Re: economic reality 164 Jock 06-Feb-19 03:14
And here is where the rubber meets the slippery, slippery road 187 Jock 06-Feb-19 22:02
Re: And here is where the rubber meets the slippery, slippery road 266 Jock 08-Feb-19 07:52


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