CIBC expects non-conventional (high-risk) Canadian mortgages to double in popularity in five years.  (See Globe & Mail story).  But don’t be surprised if it happens a lot quicker than that.  With our newfound access to bigger mortgages for the same income level, Canadians will surely follow the same path as Americans (i.e.  buy more expensive houses than they could normally afford, and extend their repayment periods). 

Americans take out unconventional mortgages 22% of the time (versus 5% in Canada).  That means we Canadians have some catching up to do…and we will.  Our average debt-to-income ratio is already at a record level of 122%, versus 117% last year.  We won’t be adverse to piling on even more mortgage debt in 2007.

Last modified: December 6, 2006