Mortgage Debt Rises

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Despite the warnings that have been said by bankers on the fact that consumers should be wary when taking household debt, Canadians are gaining an appetite for risk and taking on longer-term mortgages.

The Canadian Association of Accredited Mortgage Professionals released a survey on Monday that shows 18% of mortgages are long-term compared with 16% a year earlier and 9% in 2007.

The problem at hand is that if consumers stretch themselves out too far now, it could become a problem later on in the future.

Many people in the industry have expressed the concern for consumers on buying more expensive properties than they normally would and load up on debt because of the low interest rates.

The average mortgage interest rate reported by respondents was 4.55%, down from 5.41% last year.

Analysts say that rates have nowhere to go but up now.

If the economy does not recover as consumers expect, then many Canadians might find themselves in a difficult spot in the future.

For people who have bought houses during the time of low interest rates, I for one hope nothing bad happens that might cause their purchase to be their downfall, especially since rates will be going up in a matter of time.

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