EDITORIAL: Starting up a ticking mortgage time bomb

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To no one’s surprise, the Bank of Canada (BOC) raised interest rates Wednesday by 25 basis points, to 5%.

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The bank is building a ticking mortgage time bomb that will impact young people hardest. Those who bought into the housing market three or four years ago, when prices were high and interest rates were moderate, will be renegotiating those mortgages soon. Soaring interest rates will place a huge financial burden on family budgets already stretched to the limit by high grocery prices.

This latest rate hike dashes all hopes of home ownership for those people considering buying into the housing market. They’ll never be able to afford the Canadian dream of home ownership. Renters, too, will suffer..Politicians can make big promises about affordable housing. The facts of life say otherwise. Many cities have a housing shortage and developers find it unaffordable to build new units.

A better strategy to cope with inflation would be for the federal government to rein in its runaway spending — especially its hiring of civil servants.

 

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