System Review: Still-Climbing Levels and Interest Rates

system review: The central bank warned Thursday that the still-climbing levels of debt and the growing proportion of highly indebted households in many cities amid low interest rates have opened up a larger weak spot in Canada financial stability, according to The Toronto Star. In its latest financial system review, the bank says at a national level the proportion of highly indebted borrowers with mortgage-to-income ratios above 450 per cent reached 18 per cent in the third quarter of 2016, up from 13 per cent two years earlier. AFP/GETTY IMAGES FILE PHOTO By Andy Blatchford The Canadian Press Thu., Dec. 15, 2016 OTTAWA The Bank of Canada is expecting new mortgage rules to help ease a continued rise in household indebtedness that it says has left the country increasingly exposed to an economic shock. The report said high home prices have helped fuel growth in the proportion of these highly indebted borrowers in cities like Toronto, where in the last two years it increased to 49 per cent from 32 per cent, and in Vancouver, where it rose to 39 per cent from 31 per cent. Article Continued Below In October, the federal government announced changes aimed at addressing hot housing markets and rising debt loads. But the bank predicted that stricter housing finance rules introduced in recent months by federal, provincial and municipal authorities will help ease household indebtedness and improve the quality of future borrowing. (news.financializer.com). As reported in the news.