Here's what's really scary about high-ratio mortgages in Canada
Canadians buying (overpriced) houses this spring with little money down, now face an additional burden with the recent announcement by CMHC – quickly followed by Genworth - that mortgage insurance will rise in price come June 1 of this year. Remember, this is the (bizarre) coverage that most homebuyers must pay for, which protects and indemnifies…
We have warned for several years that the Canadian real estate market is overpriced and in bubble territory. High ratio borrowers are the likely candidates to push prices over the edge as they begin a series of defaults. As they learned south of the border in the 2007 real estate bust, prices that go up quickly can also drop quickly.
So much for housing being a store of value for retirement.