The mortgage meltdown that's so drastically hitting the American Real Estate marketplace is going to have only a slight impact on the Canadian market - according to our resident mortgage authority Moira Steele.
In a nutshell, the mortgage collapse south of the border is going to have only a slight effect on its Canadian counterparts - due mainly to the type of mortgages involved. The so-called "Sub Prime Mortgages" at the heart of the American crises are essentially mortgages lent with little or no actual collateral, given to individuals with sketchy at best financial backgrounds. The end result of all this has been massive numbers of default mortgages, with the result that some 90 American financial institutions have been forced out of business. In the US, sub prime mortgages represent some 20% of the mortgage market - while in Canada that figure is closer to 5%. Moira says that the smaller sub prime market in Canada means the country's mortgage industry is much less likely to be affected. Canada's industry is considered much more conservative than its American counterparts, with the pleasant result being our industry may have some bumps, but not the major shake up that is occurring in the US.