10% of Toronto mortgage holders won’t qualify to refinance next year, BoC says

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Nearly one in 10 mortgage holders in the Toronto area won’t be able to refinance their loans or renew them with a new lender in 2027 if home prices remain at current depressed levels, according to a Bank of Canada report.
The central bank’s financial stability report, released late last month, estimates 9 per cent of borrowers in the Toronto region could not qualify to refinance their loans next year. Nationally, the bank estimates the level to be 4 per cent.
That’s because these borrowers’ property values have fallen significantly since they got their mortgages. These borrowers will not be able to take equity out of their homes to pay down debts – one way of refinancing a loan.
They also will not be able to refinance their loans in other ways, such as lengthening the time it takes to pay back the loan or simply renewing a mortgage with a different lender.
If borrowers are not able to pursue these options, that may eventually lead them to miss mortgage payments.

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easier and cheaper to walk away and rent (or go back to Amritsar).
 
Upvote 9
So the issue isn't renewals but refinancing, ie, increasing your mortgage loan to cover accrued consumer debt. I knew some people did this but didn't realize it was this common. Don't operate your household expenses like the government, folks.
 
Yes, but this is Canada.

Was watching Angry Mortgage podcast, he had an insolvency trustee on, it’s gonna get much uglier. If you own a home plus a second income property, you can’t do a consumer proposal, you are forced into bankruptcy.
 
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