Tapping Home Equity a Great Way to Combat Rising Personal Debt Levels

Posted on 9th December 2014

According to recent findings, Canadians are piling on the debt. Canadian consumers collectively owe more than $1.5 trillion, up 7.4% from $1.4 trillion a year ago. The average total debt owed on items like cars, vacations, and shopping and paying hydro now stands at $20,891. The sector that experienced the most growth was auto loans, increasing 6.8% year-over-year. That doesn’t factor in mortgage debt.

This is a significant number: for every dollar that Canadians earn, we owe roughly $1.65 to credit card companies, banks, and other lenders.

Even if Canadians rein in their spending, it doesn’t look like we’re going to get much of a break. That’s because the cost of food is going to climb as much as 2.4% in 2015; that’s faster than the rate of inflation.

For whatever reason, many Canadians find themselves overwhelmed with debt. It could be due to a lost job, unexpected expenses, overspending during the holidays, or even the rising cost of living.

On the plus side, even though debt levels are increasing, the delinquency rate (bills more than 90 days past due) is on a downward trend and stands at just 1.1%. This is due in large part to the ultra-low interest rate environment.

But that could be in jeopardy. First, debt levels can become more unmanageable should Canadians get hit with a large, unexpected bill. On top of that, an eventual uptick in interest rates could put added stress on daily finances.

The mortgage experts at Canadalend.com can help those overwhelmed with debt overcome the day-to-day financial stresses through debt consolidation. Debt consolidation is about taking out an equity home mortgage loan; by doing this, you can consolidate several debts into one easy payment.

You can also refinance a first or second mortgage into a single monthly payment with one interest rate. With interest rates near record lows, it’s still a good time to take advantage of the equity you have built up in your house.

One of the main benefits of a debt consolidation loan or first or second mortgage is that the interest rates will be significantly lower than what bank credit cards or store credit cards charge. You can choose to pay off your mortgage as quickly as possible or reduce your monthly payments and use the extra money for other expenses.

That said, no matter where interest rates are, you’re going to save money by getting a consolidation loan or home equity line of credit (HELOC).

If you’re a homeowner and struggling with debt, Canadalend.com can help you refinance your mortgage at the best rates and conditions possible. To see what kind of loan you qualify for, contact the experts at Canadalend.com today or apply online and a mortgage specialist will help you set up an appointment for a free personal consultation.


“Canadian Consumer Credit Trends, Q3 2014,” Equifax web site December 12, 2014; www.equifax.com/international/canada/documents/Equifax_Canadian_Consumer_Credit_Trends_Q3_2014.pdf.

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