While we wait for the October data from the real estate boards; I caught an interview on BNN yesterday with Mark Cashin, a Toronto mortgage broker who was being interviewed on the subject of "shadow lending" in Canada, ie: the non government insured mortgage lenders who have to actually assess risk when lending.
After the 1.30 minute mark in the interview, Mr Cashin remarked that a conventional 1st mortgage rate in the private market would be set at 6%.
RateHub quotes fixed 5 year term rates at 2.12 to 2.19% in Toronto and 10 year fixed rates at 3.59 to 4.69%.
If we had a primary banking industry that had to actually do their job of assessing risk and lend money out at market rates, the interest charged to offset that risk would probably be twice today's government "too big to fail" ZIRP and NIRP model.
Canadians are being kept in a subsidized credit market bubble apparently immune from the shadows of reality of the risk of over leverage. It's all good of course if the borrowers with weak hands can hang on to their cash flow and service their debt.
I suggest that if one is still willing to leverage up to buy real estate at this time in Canada, one should match their mortgage amortization with their employment contract amortization. I doubt if many employers have a 25 year horizon when looking at the labour pool.
Canada’s Housing Bubble Makes America’s Look Tiny