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Once upon a time, the debt service levels that are used to determine the amount of mortgage money that we can borrow were lower than they are today. The new mortgage stress test that was recently implemented looks like it takes us back in the direction that we’ve come from. This is the thrust of the following Globe and Mail article:

However, it makes me want to know how the ratio between average annual house price and average salary compares between the time referred to in the article and today.  I’m suspicious that relative to annual wages, houses are more expensive today.  If that is true, then not only is it more difficult to qualify for a mortgage today but at the same time, the house that we hoped to buy today is getting more expensive.  At some point, the number of us who qualify to purchase a house will start to approach the number who could qualify in the past. That will represent a smaller percentage of the population today than in the past.