I  met with an elderly couple this week. I had not seen them for close to 9 years. I remembered them well and in fact I thought they both had not changed much. They could easily qualify as Mr. & Mrs. Average Canadian. When I first met these pensioners they were just retiring. They had a beautiful single family home in the country and I believed we did a good job in tidying up their finances. Imagine my surprise when we met this week that $40K worth of debt had been built up again.

At Robert Floris’ Mortgage Architects office we want to share this story to demonstrate how homeowners are getting stretched and how expensive it is to live in Ontario. This couple was in the so called “Golden Years”. They had done all the right things by working hard and raising a wonderful family. Their problem was their total pension income was $34K. They had a mortgage of approximately $120K and $40K in credit cards and lines of credit. My first thought was that they were poor at managing their money. How wrong I was. After their current mortgage payment and taxes, they outlayed $900. Needless to say, they could not rent for any cheaper. Was it their mortgage interest rate. No. It was cost of living. An analysis showed utilities, maintenance and food had skyrocketed from 8 years. They were not spenders.

I investigated Ontario debt and discovered that the age group with the highest per capita debt levels were from the age levels between 45 to 65. Wasn’t this the demographic level where we should have our act together? I have thought of this elderly couple all week. They should be living with more dignity and less stress.

As prices continue to climb, including home prices, will more decent Canadians continue to count pennies? I hope not. If and when mortgage interest rates do climb, Canadians debt levels might implode.