April 8, 2019 | ‘Piggybank Empty’ for Tapped Out Canadian homeowners

Canadian insolvencies are on the rise as their debt comes home to roost. For more on this and why the piggybank is empty for some Canadians looking to borrow against their home, BNN Bloomberg spoke with Keith Emery, operations director at Credit Canada. Here is a direct video link.

Meanwhile, a Stats Can report this week highlights the harm that lax lending and ultra-low rates have wrought on Canadian seniors. While those that are homeowners have seen their property prices rise over the last decade, so have property taxes, carrying costs and related serves (as well as rents for non-owners) while their income from savings has halved with low yields. The result has been a troubling double in the median household debt-to-income ratio for households over age 65 since 1999, with 36% of senior households having more total debt than income in 2016 up from 21% in 1999. These debt ratios are pretty certain to have worsened further since the 2016 data (latest available).  Elder years are no place to be carrying debt as the report Debt and assets among Canadian senior familiesnotes:

“The level of debt and value of assets are especially important for the financial security of seniors. Because income typically declines during the retirement years, seniors often need accumulated assets to finance their consumption, especially if they do not benefit from a private pension plan…Debt can also be particularly problematic for seniors as repayment can be more difficult on a reduced income.”

Danielle Park April 8th, 2019

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