To The Pointwith Boris Bozic
Commentary, Opinions, Thoughts and Discussion on Current Events, Politics and The Mortgage Industry

6 Comments Mortgages: A Head Scratcher For Consumers

Article written by Boris Bozic on the 24 Jan 2012 in Mortgage

“We, the consumer, read about these mortgage issues in the media and try to understand but the complexity of these issues leave us somewhat baffled.”

The Bank of Canada decided to leave the overnight lending rate at 1%, and we’re all but assured that rates will mill remain at current levels for the remainder of 2012.  Sure, things could change but for rates to trend upwards would mean that the BOC is no longer concerned about our fragile economy.  There was also good news – the Minister of Finance said there would be no changes to the  “mortgage rules” at this time.  With the caveat that Finance is prepared to intervene if necessary.

 What would make it necessary for the Fed’s to intervene? Where’s the line in the sand?  That’s what I find intriguing about about the “consumer debt” debate.   Many have stated there should be real concern over the consumer debt levels but no one has stated that if we reach a point where the debt exceeds “X’ percent we will have passed the point of no return.  Talking about these issues in an abstract or theoretical context may be interesting, and illuminating, but for it to have real impact – a change in borrowing habits – clearly defined parameters are required.

Open dialogue is healthy and all stakeholders should be a part of the discussion.  I find it curious that the one stakeholder who we haven’t heard much from as it relates to the “consumer debt” debate is, well, the consumer.  The text being allocated to this issue is courtesy of the politicians, bankers and those suppliers who benefit economically from increased borrowing.  I’m not sure what the collective voice of the consumer would be regarding this issue but if I was to venture a guess I would think it might sound something like this…

mortgages-are-confusingFirstly, we the consumers would like to thank the bankers, economist and politicians for giving us an opportunity to have our voices heard.  We consumers aren’t as smart you folks are when comes to credit.   You’re the experts and you do this everyday.  We read about these  issues and  try to understand but the complexity of these issues leave us somewhat baffled.  We hear from you really smart folks that our homes are overvalued by 10% to 15%.  Some of you  are also concerned about how much money we’re borrowing.  Yet you same smart folks just started an interest rate war.   This is where it gets really complicated for us.  You say homes are overvalued yet you lower your  interest rates so you can compete for over valued properties to mortgage?   You say you’re concerned about our debt levels yet you lower rates so we can take on even more debt?  These issues are way above our heads so we the consumers are going to focus on something which is much easier to understand,  like how to split an atom”.

 Until next time,



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I find it so interesting that the Government is so concerned about Consumer Debt, and Mortgage debt. They have us all worried that we are in over our heads… I think that it is a diversion tactic to keep us focused off the true debt issue! Our Governments debt load. Has anyone done the numbers for that debt load at a percentage of our income???..Probably not, we would actually all have heart attacks. Every man women and child in Canada is into the Governments debt by about $200,000 per person. Where is the real debt issue??? Me thinks we are being fooled!!! Maybe if they think that if they get us to take care of our own consumer debt then they will feel safe upping taxes to take care of theirs… ??????????

Angela Kroemer @Twitter ID Website Reply

So true.

This has some great points. I’d like to add to it a little. There is so much worry about consumers taking on to much debt yet on a weekly basis the banks are calling giving us new Credit cards and loans that we have been Pre-Approved for! When are these banks going to have restrictions placed on them? At least my mortgage has an asset attached to it and time was taken to confirm I qualified for it. We can’t expect our debt to lessen when we make consumer debt so easily attainable.

Hey KarenB, You’re somewhat high in your estimate of debt per person. By a LOT!! Somewhere under $20,000 would be a closer figure. see

Mortgages: A Head Scratcher For Consumers Website Reply

[...] written by Boris Bozic on the 24 Jan 2012: Article « Previous [...]

My apologies, Rick you are correct… one to many zeros…
Canadian Debt expected to reach $605,000,000,000. by 2013 and approx 33, 500,000. people in Canada. So if every baby born, every senior, every unemployed person, every stay at home parent and ever wage earner, pitched in $18,333. we would be out of debt. Hmmm -Can it happen! I realize Canada is in much better shape then many other countries and for that we need to respect what has been done to manage that, but still… Who has the debt problem? Every Family with a mortgage? I also agree with Nicole. When are they going look to where the real problem is. Over 30% of the population is over extended in their consumer debt… Only 30%! over 60% of us are managing it very well! Why? The spenders keep spending more because they can! The credit limist goes up ! The consolidated credit cards are run back up… And new cards are issued.

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