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That’s the percentage of after-tax income households must spend to pay the interest on their debts – not just the mortgage, but also car loans, credit cards and lines of credit.
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Canadian households are carrying debt equal to 177 per cent of annual disposable income.īut there’s another number that should be more concerning: the debt service ratio. Thanks to soaring real estate prices – driven to extremes through a combination of constrained supply, low interest rates and eager lenders – Canada’s total household debt has hit a record $2.2-trillion. Welcome to the Canadian suburbs, circa 2019, where the country’s debt problem is at its worst, and where the dream of owning a home on a leafy street with a garage and a lush yard for the kids is, for many, a long way from reality. At any given time, the young father has six vehicles parked on his property.
#NIGHTMARE ON TRAP STREET DRIVERS#
To help pay the bills – even just the monthly interest charges are staggering – he rents out his basement to three or four students, and two truck drivers rent bedrooms on his second floor. “‘What is $1,500? What is $2,000? Let me just run this credit card here.’ A lot of people do it.” “The more you work, the more you spend,” says Mr. On top of that, he has $24,000 in credit card debt. Each month, the payments on his roughly $700,000 mortgage are $4,300.
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He owns a $1-million house in Brampton, a sprawling suburb northwest of Toronto. Navin Seepaul is a 29-year-old single dad who makes $30,000 a year as a barber. Brampton, Ont., is home to some of the country's most financially distressed neighbourhoods.