Paying off the debt accumulated during the long afternoon of rock-bottom interest rates would likely be the biggest challenge for Canadian borrowers in the next few years, according to a joint analysis by Equifax and the Canada Mortgage and Housing Corporation.
A combination of rising interest rates and the larger debt loads of recent years have pushed average monthly housing payments much higher in Q1 2018 compared to Q4 2017, Better Dwelling reported.
The CMHC and Equifax warned that this is just the beginning as interest rate growth is trending towards more normal levels, coming off from the record lows of the past few years.
This has become especially apparent in red-hot Toronto and Vancouver. The average monthly mortgage payment in Toronto reached $1,662 in Q1, representing a 6.4% increase from the last quarter. In Vancouver, this figure was $1,794 per month at the end of the first quarter, up 6.53% from Q4 2017.
To compare, Montreal – acknowledged as an up-and-coming market in terms of housing prices – saw the average payment touch $1,060 in Q1, up 2.51% from the quarter prior.
Payments for home equity lines of credit have also seen a market rise in the first quarter of the year. In fact, their rate of growth has been nearly double that of monthly mortgage dues.
In Toronto, borrowers owed an average monthly HELOC payment of $518 in Q1 2018, up 12.85% from the previous quarter. HELOC holders in Vancouver made an average monthly payment of $594 in Q1, up 10.82% from Q4 2017.
To compare, Montreal’s HELOC holders paid an average of $582 monthly in Q1, up 5.82% from the quarter prior.
