Banker warns of trouble ahead for Canada’s home owners

Owners of property in Canada are being warned against overstretching themselves financially by Mark Carney, Governor of the Bank of Canada as he looks to the long term future where interest rates will be higher.

Several top financial advisors have in the past couple of years highlighted the need for homeowners to exercise caution when arranging home loans at a time of unusually low interest rates as interest rate rises are inevitable and people need to ensure that household budgets have the flexibility to cope with much higher mortgage payments as and when they occur.

Prices of residential property in Canada are now around 13 per cent higher than the level of the 2008/2009 slump and Vancouver has seen house prices rocket by more than 25 per cent during the last twelve months leading many to predict trouble ahead for households that are mortgaged up to the hilt.