Yesterday we made reference to the CREA's campaign to keep Finance Minister Jim Flaherty from changing the mortgage rules.
As part of that campaign, Realtors are being urged to fill out this form letter and send it off to their local Member of Parliament (click on image to enlarge).
In a blogosphere response, one of the contributors to the Vancouver Condo Info website (Jessie) has put together a form letter to urge your Member of Parliament to encourage the Finance Minister to follow through with mortgage changes. Here is the content of the form letter:
- To: Hon. Jim Flaherty
Your MP's name here
I am writing you supporting potential changes to mortgage financing rules in the upcoming year. As you are undoubtedly aware, the average Canadian household debt to household income ratio has increased significantly in the past number of years and has now exceeded that of the United States. This was made possible by historically, and unsustainably, low interest rates on mortgages. As has been shown in other OECD countries, there is some evidence to suggest that households are primarily concerned with their short-term financial health -- the ability to service today's debt with low interest rates -- and less concerned with their long-term financial health -- the inability to service service tomorrow's debt with high interest rates. I have not seen any data or arguments to suggest that household debt will start decreasing in the coming year as long as interest rates remain low. My concern is that without further tightening of mortgage financing rules, Canadians will continue to take on debts that are unsustainable in the long-term.
While I am a believer in free markets, the growth in household debt is not sustainable when interest rates rise and I am not confident households will start saving while debt is so "cheap". If measures are not taken sooner rather than later, the resulting overhang of debt will put Canada at a distinct disadvantage relative to its trading partners, whose households have started to rebuild their balance sheets and will be in a much better position to weather the inevitable interest rate rises in the coming years.
Choose your weapon.
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