Carney Talks about Solution for Containing Canada’s Household Debt

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While BOC’s Has Asked Canadians to Become More Vigilant In Order To Deal with Household Debt, Mortgage Expert Marcus Arkan Discusses Some Current Facts Regarding Major Problems Faced By Canada’s Home And Mortgage Industry

Toronto, Ontario - Mark Carney, governor of Bank of Canada, has recently told the House of Commons finance committee that vigilance by all parties is required in order to properly contain the household national household debt. This statement was reported by The Province on October 31. Marcus Arkan, Mortgage Expert and CTO of Syndicate Mortgages, has termed Mr. Carney’s statement as a highly realistic and timely suggestion. While the country may not be heading for a US style bubble right now, Mr. Arkan emphasizes the importance of controlling and containing the situation before it too late.

According official BOC’s figures, the household debt in Canada has reached a level higher than that of the US during the ore-crash time. Mr. Arkan stated that despite the higher level of debt, Canada is currently safe from a housing market crash due to relatively slower speed of rise in this debt. However, issuing similar warning to Carney’s statement, Mr. Arkan said, “This may be good news but that does not mean we can or should keep on borrowing at the same pace. We need to contain the household debt in order to avoid a crash anywhere in the future.”

Bank of Canada was among the first major banks to set their interest rates as low as 1% during the recovery period after the recession. While this was a move to stimulate spending and investment after the recession, the Bank increased the rate in 2010. According to Mr. Carney, BOC will further lift their borrowing cost in case the new mortgage rules prove insufficient in controlling the overheated market.

Analyzing Mr. Carney’s statement, Mr. Arkan predicts that interest rates are likely to go up despite the recent slowdown in housing market and a growing economy. “We are likely to see a 2.3% growth in 2013. However, the major risks we are facing right now are external rather than internal. If the US faces recession again, Canada might also feel the blow. Similarly, if the European debt crisis is not contained properly, the situation in our country will also change to some extent.”

While asking all the parties to become more vigilant in containing the household debt, Mr. Carney ensured that BOC will play its part well. He also warned the borrowers not to get too comfortable with the currently higher household wealth. “For many people, assets may worth more than their debt but assets are not liquid. In case the real estate value tumbles, people won’t be able to sell their homes. This would lead to a crash-like situation,” warns Mr. Arkan.

About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.

Contact Details
Syndicate Mortgages Inc.
Toll Free: (888) 646-1062
Email: info (at) smibroker (dot) com

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