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RBC has published their Housing Affordability Measure since 1985. It reflects the costs of owning a detached bungalow at market value. The higher the measure, the less affordable a home is.

As an example, a measure of 32 per cent means that home ownership costs consume 32 per cent of a typical household’s pre-tax income. This includes mortgage payments, utilities and property taxes. Frighteningly, many Canadians are carrying a monster mortgage that tops the affordability index charts!

Scary Numbers!

Using data from December 31, 2017, this chart shows housing affordability in key regions across Canada. Specifically, the data covers the least affordable (Vancouver) to the most affordable (St. John, NB).

You think these numbers are scary now? imagine the horror of death, disability or critical illness striking one of the income earners making the mortgage payments!

RegionHousing Affordability Measure
Vancouver Area, BC85.2%
GTA, ON75.1%
Victoria, BC61.6%
Montreal, QC44.1%
Calgary, AB42.1%
Ottawa, ON36.1%
Saskatoon, SK33.4%
Quebec City, QC32.7%
Halifax, NS32.3%
Winnipeg, MB30.6%
Regina, SK30.2%
Edmonton, AB27.7%
St. John’s NF27.1%
Saint John, NB25.4%

A well-designed insurance portfolio has never been more important. You are worth more than you think when you tally up the value of your future income.  More importantly, you’re also counting on that income to make the mortgage payments for the next 25 – 30 years! If you believe your income will continue nonstop, that’s a pretty scary bet!

Most of us carry enough home and car insurance to protect against major property loss. However, we often neglect the three big risks that will hit us the hardest. The following chart paints a good picture:

Likelihood of Major Risks

Sources: Statistics Canada, Commissioners Individual Disability Table A, Heart & Stroke Foundation, Multiple Sclerosis Society of Canada, National Cancer Institute

These statistics are for one person and most households depend on at least two incomes, so the risk is even greater. To illustrate, Manulife offers a great calculator giving you the risk for your own unique circumstances. You can try it out at www.insureright.ca/what-is-your-risk/.

If you signed up for bank-issued mortgage life insurance, it’s better than nothing. However, there are problems. We have written an article called “7 Things the Banks Don’t Tell You About Mortgage Protection Life Insurance.” It’s required reading if you want to secure your family’s ability to live in their home in event of death, illness or injury. You can also click below to download the special report or contact us if you’d like to talk about it.

Protect your family from losing their home.

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