Determinants of Mortgage indebtedness in Canada
Mortgage indebtedness has risen considerably in Canada in recent years, pushing households’ debt-to-income ratio to an all time high. In order to identify what variables explains these changes in the stock of debt, we analyze the inflow and outflow of mortgage financing. We show that the number of new mortgage loans is mostly influenced by nominal interest rates while their average value reacts only to housing price. As to the outflow of debt repayment it is sensitive to more variables. Since housing price is also strongly influenced by nominal interest rate, we show that the main driving force towards higher Canadian households’ mortgage debt is the reduction in nominal interest rate.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (819) 821-7233
Fax: (819) 821-6930
Web page: http://www.gredi.org/home/documents-de-travail
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:shr:wpaper:07-11. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luc Savard)
If references are entirely missing, you can add them using this form.