My understanding is that a credit score is hardly an indication of anything and that it is not actually use by creditors, especially the mortgage ones, to make a determination on eligibility.
Prices up. Wages down. Debt defaults. Here’s an idea: Wages up, prices down, no debt defaults. It’s not rocket science.
Stokesmyfire on
I have a variable rate on a 570k mortgage. I was able to increase my payment as interest rates rose, when I renew in 10 months my payments will remain around the same as they are now.
On the flip side I know some people who allowed their mortgages to go into negative amortization and those will be the ones with issues.
LabEfficient on
Remember: most economic problems in Canada are the direct result of Canadians’ voting choices. Pay your taxes. Elbows up.
GoodMorningOttawa on
Interest rates are too high.
Record grocery and bank profits (driver of inflation), ideally energy spike will be temporary too.
5 years ago, overnight rate at 0.25%, now at 2.25%. People renewing mortgages are stressed as is. Now many will renew for considerably higher rates, all going to services interest. I.e. banks profits.
Also unprecedented times need some lube to get this economy pivoting.
Low interest rates = Lower canadian dollar makes exports more lucrative.
Also, population is flattening to declining. This will be an inflation coolant.
ProtonPi314 on
The billionaires are very happy! Things are going as plan.
The more you struggle, the more you have to work, the more money they make.
the_sound_of_a_cork on
The stress test should have been based on income to price (excluding any down payments that came from gifts or borrowed money). Too many expensive homes sold to household incomes that had no business buying those homes.
Narissis on
I think I have a decent credit score, but I’m broke as hell. 😛
Tucancancan on
I’m just gonna float this idea but a score that measures the debt someone takes on and how they repay it, isn’t measuring how stable their sector of employment is. It’s all good until the employer goes kaput
TheShade247 on
I warned you all about this in 2021, and I got a lot of hate for it. Reddit even deleted my comment.
Alarmed_Food6582 on
Paywall.
Level_Recognition406 on
Credit score gauges past credit history, not whether mortgage payment suddenly jumps 40% at renewal.
High credit score can’t help you when housing prices are astronomical and interest rates don’t stay near 0 forever.
Schemeckles on
I know two people who are up for renewal this summer, that bought a few years back.
Neither of them will completely screwed. But are definitly not thrilled that the next few years will be an asskicking for them.
Bushwhacker42 on
I’m personally looking at first homes right now. I just did my pre approval, I’ve got an 818 credit score, and have worked out of town making $150k+ for the last 5 years. The broker was almost giggling when he saw my numbers and wanted to give me double what I felt comfortable taking on as a mortgage.
I live in Winnipeg and should be able to comfortably buy a fairly decent house. But even starter homes are ridiculously priced and selling well above asking. I sympathize for BC and southern Ontario, I don’t know how you possibly do it. But how on earth are Winnipeg houses comparable to southern Ontario outside of GTA prices?? And if buying a starter house is a stretch for me, then how do people with “normal” jobs do it?
With every spare dime going into housing, nobody can afford to live. How are restaurants and nail salons staying open? Housing has become such a burden for so many across the country. With automation and AI, so many white collar jobs are being eliminated. This is flooding the trades causing a downward push on wages. Add a huge influx of entry level workers willing to work for even less… our economy is cooked. Young kids can’t get jobs. Old timers can’t afford to retire. Entire industries becoming automated and no extra money in people’s pockets to support anything except the roof over their heads. This is a recipe for disaster.
space-dragon750 on
wait wait wait
the housing crisis is a crisis? i’m shocked /s
ManSharkBear on
What does credit have to do with anything here?
People bought a million dollar house on a ~1.5% interest rate and it ballooned to 4/5/6+ %
They’re just fucked because of wage stagnation and poor life choice/foresight.
TacoSpacePirate on
How about when I sign up for a mortgage the monthly payments I agree to are what I pay for the ENTIRETY of the mortgage. How many people have an extra $1,000/month laying around for when their mortgage payments suddenly skyrocket over night.
18 Comments
My understanding is that a credit score is hardly an indication of anything and that it is not actually use by creditors, especially the mortgage ones, to make a determination on eligibility.
Paywall bypass: [https://archive.is/2x4uX](https://archive.is/2x4uX)
Prices up. Wages down. Debt defaults. Here’s an idea: Wages up, prices down, no debt defaults. It’s not rocket science.
I have a variable rate on a 570k mortgage. I was able to increase my payment as interest rates rose, when I renew in 10 months my payments will remain around the same as they are now.
On the flip side I know some people who allowed their mortgages to go into negative amortization and those will be the ones with issues.
Remember: most economic problems in Canada are the direct result of Canadians’ voting choices. Pay your taxes. Elbows up.
Interest rates are too high.
Record grocery and bank profits (driver of inflation), ideally energy spike will be temporary too.
5 years ago, overnight rate at 0.25%, now at 2.25%. People renewing mortgages are stressed as is. Now many will renew for considerably higher rates, all going to services interest. I.e. banks profits.
Also unprecedented times need some lube to get this economy pivoting.
Low interest rates = Lower canadian dollar makes exports more lucrative.
Also, population is flattening to declining. This will be an inflation coolant.
The billionaires are very happy! Things are going as plan.
The more you struggle, the more you have to work, the more money they make.
The stress test should have been based on income to price (excluding any down payments that came from gifts or borrowed money). Too many expensive homes sold to household incomes that had no business buying those homes.
I think I have a decent credit score, but I’m broke as hell. 😛
I’m just gonna float this idea but a score that measures the debt someone takes on and how they repay it, isn’t measuring how stable their sector of employment is. It’s all good until the employer goes kaput
I warned you all about this in 2021, and I got a lot of hate for it. Reddit even deleted my comment.
Paywall.
Credit score gauges past credit history, not whether mortgage payment suddenly jumps 40% at renewal.
High credit score can’t help you when housing prices are astronomical and interest rates don’t stay near 0 forever.
I know two people who are up for renewal this summer, that bought a few years back.
Neither of them will completely screwed. But are definitly not thrilled that the next few years will be an asskicking for them.
I’m personally looking at first homes right now. I just did my pre approval, I’ve got an 818 credit score, and have worked out of town making $150k+ for the last 5 years. The broker was almost giggling when he saw my numbers and wanted to give me double what I felt comfortable taking on as a mortgage.
I live in Winnipeg and should be able to comfortably buy a fairly decent house. But even starter homes are ridiculously priced and selling well above asking. I sympathize for BC and southern Ontario, I don’t know how you possibly do it. But how on earth are Winnipeg houses comparable to southern Ontario outside of GTA prices?? And if buying a starter house is a stretch for me, then how do people with “normal” jobs do it?
With every spare dime going into housing, nobody can afford to live. How are restaurants and nail salons staying open? Housing has become such a burden for so many across the country. With automation and AI, so many white collar jobs are being eliminated. This is flooding the trades causing a downward push on wages. Add a huge influx of entry level workers willing to work for even less… our economy is cooked. Young kids can’t get jobs. Old timers can’t afford to retire. Entire industries becoming automated and no extra money in people’s pockets to support anything except the roof over their heads. This is a recipe for disaster.
wait wait wait
the housing crisis is a crisis? i’m shocked /s
What does credit have to do with anything here?
People bought a million dollar house on a ~1.5% interest rate and it ballooned to 4/5/6+ %
They’re just fucked because of wage stagnation and poor life choice/foresight.
How about when I sign up for a mortgage the monthly payments I agree to are what I pay for the ENTIRETY of the mortgage. How many people have an extra $1,000/month laying around for when their mortgage payments suddenly skyrocket over night.