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Money Mortgage borrowing among Canada's millennials sees major pullback

20:31  13 june  2018
20:31  13 june  2018 Source:   huffingtonpost.ca

Mortgage borrowing slides to lowest point since 2014

  Mortgage borrowing slides to lowest point since 2014 Canadian mortgage borrowing over the first three months of 2018 fell by $2 billion to $13.7 billion — the lowest level since 2014 — following the introduction of new lending rules and a rise in interest rates.Canadians' mortgage borrowing over the first three months of 2018 fell by $2 billion to $13.7 billion — the lowest level since the second quarter of 2014 —  following the introduction of new lending rules and a rise in interest rates, Statistics Canada reported Thursday.

(Photo: Jonathan Hayward/CP). Millennials could lose as much as 20 per cent of their "purchasing But this family would be borrowing well beyond their means, as defined by the Canada Mortgage and Housing Corporation (CMHC). But he nevertheless sees it causing problems in the short term.

"In major cities across Canada , a growing number of peak millennials will save, pool their money with a partner and/or borrow funds from Among Canada ' s major cities, there are But not everyone believes the price hikes Toronto, Vancouver and some other places have seen in recent years will

Related video: 5 secrets from real estate insiders [Provided by GoBankingRates] 

There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead.

According to new data from credit bureau TransUnion, new mortgage originations among millennials in Canada fell by 19.5 per cent between the last quarter of 2017 and the first three months of 2018, when tougher new federal mortgage rules kicked in.

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  Are millennials skimping on tips? About 10% of millennials say they usually leave nothing as a tip for a server when dining out at a restaurant, but they aren't the only demographic that is stingy.About 10% of millennials say they usually leave nothing as a tip for a server when dining out at a restaurant, compared to just 3% of those who are older. Furthermore, 18% typically decline to leave any amount when presented with pre-entered tipping options in a taxi/Uber/Lyft, at a food truck, at a coffee shop and so on, versus 12% of older adults.

However, despite the criticism of the company, more millennials are using Uber now than ever before, as In the first six months of 2017, Uber gained a larger percentage of millennial customers since the first half of 2016 than any other major brand, according to data SEE ALSO: Uber' s bad year: The

Watch: How much home can Canada ' s "peak millennials " afford? The situation here is not nearly as dire, but with house prices soaring in many parts of the country over the past decade, Canada now runs the risk of seeing a similar phenomenon take place.

That's a much steeper drop-off than seen in other age groups. For the country as a whole, mortgage originations were down 8.8 per cent, and among the elderly pre-war Silent Generation, mortgages actually grew by 7.8 per cent.

a man standing in front of a building: There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead. © Provided by AOL Inc. There's been a steep drop-off in the volume of mortgages that Canada's millennials are taking out, a sign that the country's faltering housing market could see more weakness ahead. The older generation is likely borrowing against the value of their home to finance their lifestyle, while "millennials may find themselves unable to afford more expensive housing, and hence are opting for lower-value homes," explained Matt Fabian, director of research and analysis at TransUnion Canada, in a statement.

Higher rates, tighter mortgage rules cool Canadian home prices: Reuters poll

  Higher rates, tighter mortgage rules cool Canadian home prices: Reuters poll Higher rates, tighter mortgage rules cool Canadian home prices: Reuters pollHigher borrowing costs and tighter mortgage rules in Canada are seen dampening the country's home price growth more than previously anticipated this year and next, including in the once-hot markets of Toronto and Vancouver, a Reuters poll found.

The Mortgage Reports Contributor. An unlikely destination for Millennials ? Lima, Ohio might not be a very recognizable city to most, but it looks like Millennial homebuyers could change that. Conventional loans dominate among Millennials .

Among Latino millennials , the numbers are even worse: 83 percent have nothing saved for retirement. Then there are the impacts from federal actions, including record federal debt and deficits -- interest rates will rise as the fed borrows to finance U. S . debt -- and the new tax law’ s caps on the

For Fabian, the drop-off in mortgages raises some questions. "Are consumers taking a wait and see approach to the new qualifying rules that came into effect? Are they pausing to measure the effect on home prices? One might have thought that consumers would rush to purchase homes before the new rules come into force to ensure they qualified for the highest loan amounts, but they don't appear to have done that."

Earlier on HuffPost Canada:

  • This Is The Best Place In Canada To Buy Real Estate, According To MoneySense
  • Canada's Housing Market Faces A Decade Of Stagnation: BMO


Millennials shifting their attention to lower-priced condos may explain why the condo market has held up better than single-family homes over the past year. But the drop-off in mortgage borrowing, particularly among millennials, suggests further downward pressure on the housing market in the months ahead.

Sharing your husband’s debt might be unwise

  Sharing your husband’s debt might be unwise Sharing your husband’s debt might be unwiseQ: My husband and I still owe $44,000 in student debt between the two of us. We each have our own credit card, and I pay mine off in full every month while he owes $16,000 on his. We own our home together and have maybe $85,000 in equity today. My husband wants to use that equity to pay off our student loans and his credit card debt. I’m not sure that’s a good idea.

There are certainly reasons to choose a major bank or large credit union for your mortgage , including branch accessibility Like traditional mortgages , the borrower assumes the risk of higher borrowing rates in the future. See : New Mortgage Rules and OSFI Guidelines [B-20] for rule summaries.

Canadian millennials are feeling higher rates in their wallets. Satisfaction rises among Air Canada , WestJet passengers, survey says. Shopify sees ‘negligible’ impact from Adobe-Magento deal: COO. BNN Bloomberg Presents: The AI Arms Race.

Housing market experts are counting on the large millennial generation to hold up Canadian real estate in the coming years, despite high prices in some markets and the prospect of rising mortgage rates. According to research released this week by real estate advisory firm Altus Group, four in 10 housing purchases in Canada are now carried out by millennial buyers.

That study found the average age of a first-time home buyer in Canada is 32, and the average household income of a first-time buyer is $85,000.

Canadians managing debt well, despite higher levels

Overall, the TransUnion report found that Canadians are handling their debt payments well despite growing debt levels. Non-mortgage debt climbed by 4.5 per cent from a year earlier at the end of 2017, to an average of $29,181. And despite the drop-off in new mortgage originations, the average size of a new mortgage was up 3.5 per cent, to $284,000.

a screenshot of a cell phone © Provided by AOL Inc.

But delinquency rates on debt are on the decline. The serious delinquency rate on mortgages (60 days overdue or more) was 0.5 per cent at the end of last year, down slightly from a year earlier. The 90-day delinquency rate on non-mortgage debt also declined slightly, to 5.4 per cent.

"We continue to see strong consumer credit performance over the past year, with apparently limited impact due to the rising interest rate environment," Fabian said.

This article originally appeared on AMP: HuffPost Canada at https://www.huffingtonpost.ca/2018/06/13/mortgage-borrowing-millennials-canada_a_23458133/ 

Follow @MSNMoneyCanada on Twitter. 

Why I'm in no rush to pay off my mortgage .
This man is more than comfortable with his home payments.Actually, no. As the title suggests, I’m in no rush to pay off the mortgage on my condo I bought in 2014. It has nothing to do with not having enough money to pay my condo off. Between my business and investments, I could — if I wanted to. However, I’m choosing to keep paying my mortgage and invest the rest.

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