Almost half of Canadians believe that they are ‘debt free’ even when they still have a mortgage.A survey by Manulife found that the younger generation in particular, do not consider a mortgage to be a burden in the same way as credit card debt.
While 29 per cent of those over 50 don’t see mortgages as debt, the figure rises to 68 per cent among those in their 20s. This view of debt may be due in part to the vast differences in interest rates; despite it being a higher level of debt, a home loan at 2.9 per cent is less daunting than a credit card with interest rates in double figures.
The different views by generation are likely to be down to experience. For those in their twenties, a loan secured on an asset which is (generally) increasing in value makes mortgages seem low risk. For the older generation, they are only too aware that interest rate hikes, price crashes, unemployment or illness are all factors that can quickly make mortgages seem very much like debt.
