News from the mortgage frontline in Canada…worth a listen.

What’s Happening to Mortgages Now That Rates Are Up? with Ron Butler | DFI30 | Well it appears that real estate prices are down in many parts of Ontario after record increases. Not surprising since the Bank of Canada has indicated it will raise rates again. But what has this done to mortgages? What’s happening when people renew? How has mortgage qualification changed? Enter Ron Butler, mortgage broker extraordinaire. On today’s podcast, Ron is back to give us an update on what he’s seeing on the ground with respect to mortgages. Here is a direct video link.

It’s worth noting that after Toronto home prices topped out in 1989, they fell an average of 28% to 1996 and did not recover 1989 levels until 2002 (see table below).  I remember this vividly. The pattern is pretty typical of housing bust cycles historically, and yes, it can happen here again.  Different cycle, similar behaviour = similar outcome.