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While Canada’s record housing prices and ultra-low interest rates continue to make news, the fact of the matter is the real estate data continues to be skewed by three markets: Toronto, Calgary, and Vancouver. This information has not gone unnoticed by the experts at Canadalend.com .

In fact, the gap between housing prices in these three cities—which represents one quarter of Canada’s housing stock—and the rest of the country is growing. The robust appreciation in real estate prices is great news to property owners in Toronto, Calgary, and Vancouver, and the growing price gap also means that 75% of the Canadian housing market is following a different trajectory.

Over the last decade, the average property values in Vancouver, Calgary, and Toronto combined have risen 83%, from $345,000 to $634,000. In the rest of the Canada, property values have climbed 60%, from $205,000 to $327,000.

More recently, over the last year, the average property value in these three cities has increased by nine percent, from $578,000 to $634,000. More tellingly, the price appreciation in these three cities, and by extension the rest of the country, is being driven by detached homes in the downtown cores. Amazingly, these properties account for just 4.4% of Canada’s housing stock.

Over the last year, property value appreciation in the rest of the country has been a more manageable three percent, from $317,000 to $327,000. This means the majority of the Canadian housing market is more affordable for the average first-time home buyer.

The experts at Canadalend.com observe that thanks to robust property values, many first-time home buyers are facing headwinds in Calgary, Vancouver, and Toronto. At the same time, other Canadian cities are actually more affordable now than they have been historically.

For example, the most affordable housing market in Canada is Windsor, Ontario, where prices are 12.2% more affordable than the historic norm. Ottawa-Gatineau is the second most affordable area, where property values are 8.6% more affordable than the historic norm. Rounding out the top five are Kingston (7.9%), London (6.9%); and Sudbury (6.5%), all in Ontario.

It doesn’t matter if you’re looking to get on the property ladder in Victoria, British Columbia; St. John’s, Newfoundland; or anywhere in-between, the lending experts at Canadalend.com can help you get aresidential mortgage at the most competitive rates.

Unlike the big banks, which only promote their own financial products, the licensed, independent agents at Canadalend.com have access to hundreds of lenders and will get you the best rates possible.

If you’re interested in seeing what kind of mortgage you qualify for, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience. Your Candalend.com agent can help you get pre-approved for a mortgage in 24 hours or less and help you find the best mortgage and rates to meet your financial and personal needs.

Sources:

Perkins, T., “Housing price disparity growing between major centres, rest of Canada,” The Globe and Mail , November 7, 2014; www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/housing-price-disparity-growing-between-major-centres-rest-of-canada/article21487447/.

“Desjardin Affordability Index,” Desjardins web site, October 29, 2014; www.desjardins.com/ressources/pdf/iad1014e.pdf.

Canada may have a stable economy, but that doesn’t mean Canadians are financially sound. And while the real estate market might be on fire, Canadalend.com observes that that doesn’t mean most Canadians are feeling richer.

In fact, Canadians are facing near-record debt loads. If Canada’s interest rates start to rise next year, climbing to more normal levels, consumers could start to find their debt loads unmanageable. This is especially concerning when you consider a whopping 42% of Canadians say they would be in financial trouble if their pay was delayed by just one week.

For example, the average ratio of debt-to-disposable income is dangerously high. The debt-to-income ratio is a common metric used to gauge how indebted Canadian households are.

At the end of 2011, the average debt-to-disposable income ratio was 150.6%; it climbed to 152% in 2012, and in 2013, it hit a record 164.1%. Today, it’s hovering around 163%. A more stable ratio is between 110% and 120%.

What does that mean? For every $1.00 in income earned, Canadians owe their banks, credit card companies, auto dealers, and other lenders $1.63 in debt. While the debt-to-disposable income ratio is down slightly from last year’s record levels, it remains high. This leaves the average Canadian vulnerable should they get hit with an unexpected expense or job loss.

Whether you’re being weighed down by debt, want it to be more manageable, or need a little breathing room, the experts at Canadalend.com can help you through debt consolidation.

Debt consolidation is about taking out an equity home mortgage loan; doing this allows you to consolidate your debts into one manageable payment. Alternately, you can also refinance a first or second home mortgage into a single monthly payment.

Of the 10% of Canadians who refinanced their mortgages last year, 62% cited debt consolidation or repayment as the main reason.

This is because consolidating high interest debt, like credit card balances and auto loans, into a low-interest mortgage can save you thousands in interest payments. Consolidating your high-interest debt (credit cards car loans) into a low-interest mortgage is an easy way to manage your payments and save money.

How? Let’s say you have $50,000 in debt spread out over three credit cards with an interest rate of 18%. Assuming you pay three percent of the outstanding balance—and don’t get yourself any further into debt—your minimum monthly payment would be $1,500.

It would also take you 352 months, or more than 29 years, to get rid of your debt. During that time, you’ll have paid the credit card companies $49,697.08 in interest.

Consolidate your debt into an equity home mortgage loan and you will not just have one convenient payment to make each month, but you will also pay a lot less in interest. That’s because interest on a secured loan is much, much lower than the interest on a credit card.

If the interest on a five-year fixed rate is 2.75%, your monthly payments plummet to $230.66. Over the 25-year amortization period, you would pay out $69,196.63, of which, $19,196.63 is interest. By simplyconsolidating your debt , you free up more than $1,200 per month, save more than $30,500 in interest, and pay off your debt five years sooner.

If you can afford to pay more each month, you can shorten the amortization period, meaning you’ll save even more in interest charges and have your debt paid off sooner.

If you own a home and want to see if you qualify for a debt consolidation home mortgage, equity loan, or refinancing, contact Canadalend.com or apply online . An independent, licensed Canadalend.com debt consolidation specialist will help set up an appointment for a personal consultation at your earliest convenience.

Sources:

“42 per cent of Canadians living paycheque to paycheque: survey,” CTV News web site, September 11, 2013; www.ctvnews.ca/business/42-per-cent-of-canadians-living-paycheque-to-paycheque-survey-1.1449473#ixzz3HSpD48xh.

Parkinson, D., “Canadians’ household debt burden edges higher in second quarter,” The Globe and Mail ,September 15, 2014; www.theglobeandmail.com/report-on-business/economy/household-debt-burden-for-canadians-edges-higher-in-second-quarter/article20573363/.

For the year ended December 31, 2013, 118,000 Canadians filed personal bankruptcy or a consumer proposal. Collectively, more than one in eight adult Canadians will either declare bankruptcy or negotiate a debt settlement with creditors.

There are a lot of Canadians with bad credit.

At some point or another, the experts at Canadalend.com observe that a majority of people with bad credit will want a mortgage. However, their options are limited. In an effort to prevent a real estate crisis in Canada like the one that ravaged real estate in the U.S., the federal government implemented a number of lending rules to discourage consumers from taking on too much debt and/or from defaulting on their mortgages.

Figures from Statistics Canada show the average ratio of debt-to-disposable income climbed from 150.6% at the end of 2011 to 152% in 2012. It went on to hit a record 164.1% in 2013 and currently hovers above 163%.

Most notably, the government reduced the maximum amortization period for a government-insured mortgage to 25 years and increased the minimum down payment. Home buyers must have a down payment of at least five percent of the home purchase price; previously, no down payment was required.

First-time home buyers with less than 20% of the purchase price of the house for a down payment must get insurance. These changes have made it more difficult for residents to qualify for insured mortgages in Canada.

Getting a mortgage if you have bad credit isn’t impossible. Ultimately, banks want to know how risky it will be to lend you money for your mortgage. There are a number of strategies you can take to get your credit back on track and head towards approval for a mortgage.

For starters, the experts at Canadalend.com understand that buying a home with bad credit or after bankruptcy is different than buying a home for the first time. For instance, lenders will want to know how long ago the bankruptcy was discharged or when your consumer proposal was completed. They will also want to know how long you have been re-establishing your credit.

In the past, if you had bad credit or had declared bankruptcy, you were stuck using one of Canada’s big banks or institutions. Fortunately, the financial landscape has changed; there are a lot more lenders out there today, many of whom are willing to finance higher risk and high ratio mortgages.

If you have bad credit and want to step onto the property ladder, contact your nearest Canadalend.com mortgage specialist. The licensed agents at Canadalend.com can show you how to rebuild your credit and help you find the best mortgage. And unlike Canada’s big banks that only promote their own products, Canadalend.com agents are independent—that means they have only your best interests in mind.

Canadalend.com has access to hundreds of lenders, a large number of which provide mortgages to clients that have filed for bankruptcy or have bruised credit. To find out how you can rebuild your credit score, get approved for a mortgage, and climb onto the property ladder, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Sources:

“Bankruptcy Canada Statistics,” Bankruptcy Canada web site; http://bankruptcy-canada.com/bankruptcy/bankruptcy-canada-statistics/, last accessed October 6, 2014.

theglobeandmail.com, article, “Canadians’ household debt burden edges higher in second quarter,” September 15, 2014; www.theglobeandmail.com/report-on-business/economy/household-debt-burden-for-canadians-edges-higher-in-second-quarter/article20573363/

Canada’s housing market is bucking the global trend. In an economic climate in which many real estate markets are struggling, the Canadian housing market is strong. And it is expected to remain resilient.

For example, before 2006, Canadian and U.S. house prices tracked each other fairly closely for at least 25 years. All that changed though when the U.S. housing bubble burst in 2007. Housing prices in Canada and the U.S. have been moving in opposite directions for much of the past six years.

More broadly, Canadian home prices are up 145% since 2000, compared to 71% in the United States. Housing prices in the U.S. have risen almost 25% since bottoming in 2012, but still need to climb an additional 20% before they even reach their pre-recession levels. (Source: House Price Index, “Teranet – National Bank National Composite House Price Index,” www.housepriceindex.ca/Default.aspx, last accessed September 24, 2014.)

The Canadian housing market, on the other hand, is up just 12% over the same time period. But it’s important to remember that the Canadian housing market didn’t go through any kind of correction. According to the most recent data, the housing gap between Canada and the U.S. is more than 60%. (Source: Tencer, D., The Huffington Post Canada, “Canadian House Prices 62 Per Cent Higher Than U.S. Prices: BMO,” April 23, 2014; www.huffingtonpost.ca/2013/04/23/canada-house-prices-us_n_3139918.html.)

Despite mortgage rates being kept low, Canadian home sales continue to close in on all-time highs. Sales of existing homes have climbed for seven straight months. In August, the national average for an existing home was approximately $400,000, 5.3% higher than a year ago. August existing home sales are at their highest levels since January 2010 and just 6.0% below their record peak in February 2007. (Source: CREA “Canadian home sales climb higher in August,” September 15, 2014; http://creastats.crea.ca/natl/index.htm.)

The mortgage experts at Canadalend.com understand that the data are a little misleading; at least for most of the country. The national average price is skewed upward by activity in the Greater Toronto and Greater Vancouver Areas. If you take these two markets out of the equation, the average price for an existing home in Canada is closer to a more manageable $325,000, while the year-over-year increase drops to 3.9%.

With Canadian housing prices trending steadily higher, many first-time home buyers are concerned they won’t be able to afford to get onto the property ladder. This is compounded by the fear that the Bank of Canada will raise interest rates in the near term.

The Bank of Canada has held its key interest rate at 1.0% since September 2010 and said it won’t raise rates until the economy improves. With the economy on stable footing, many are wondering when interest rates will rise and how high.

Because the Canadian and American economies are so intertwined, most economists don’t think Canada will raise its interest rates until the U.S. does. And with the U.S. economy still fragile, it doesn’t look like the U.S. will raise its key interest rates until late 2015.

Even then, the U.S. lending rate is significantly lower than the one set by the Bank of Canada, so if the U.S. does raise it in late 2015, this doesn’t mean interest rates will move higher here. In fact, because of the gap, interest rates in Canada could remain historically low until 2016.

Going forward, according to a senior deputy at the Bank of Canada, the country’s post-recession neutral interest rate is likely going to be just 3.0% to 4.0%. That’s 1.5% below the historic norm.

Lower interest rates for the near future make for welcome news to first-time home buyers . If you’re looking to buy your dream home this autumn, now is a great time to contact a licensed, independent mortgage agent at Canadalend.com.

Your Candalend.com agent can help you get pre-approved for a mortgage in 24 hours or less and help you find the best mortgage and rates to suit your personal needs.