Margo Wynhofen

From National Bank of Canada

• There is a great deal of concern regarding the vulnerability of Canadian households not only to inflation shock but also to sharp interest rate hikes.
• For heavily indebted households, the bill could prove hefty. Those that contracted mortgages 4.Sx their gross income could see their monthly payments increase by $187 to $281 from 2022 to 2024 and absorb as much as 2.6% to 4.0% of their net income.
• At the macroeconomic level, however, the story is far different given the high proportion of properties without mortgages. By our calculations, the payment shock related to servicing the accumulated debt will represent 0.65% of disposable income over the next three years. The amount is significant but manageable in that it alone will not suffice to pull the economy into a recession.

https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/special-report_220728.pdf