The report also said mortgage arrears are up 50% year-over-year. Some of the media has picked up on this, suggesting that defaults are soaring.
The arrears statistics Vanier quotes have been out for a while. October arrears (upon which Vanier’s findings are based) were announced a few months ago, so this isn’t the breaking news some have made it out to be.
More importantly, while a 50% arrears increase may sound large (it’s actually 44% based on the latest data), the absolute number of arrears is still ultra-low by international standards.
Less than 5 out of 1,000 Canadian mortgagors is in arrears (i.e., late on payments by 90 days or more).
Compared to a year ago, 5,699 more borrowers were in arrears (based on the October 2009 data used in the report).
On the other hand, there were 91,986 more mortgages in that same one-year time period.
Sidebar: The CBA is the most quoted source of arrears data in Canada, and the source used in Vanier’s report. This data is from the biggest lenders only and includes most, but not all, Canadian arrears.
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