Edmonton leads the nation in house owner defaults

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Above average debt levels and missed payments may reflect the struggles the Albertan economy has faced in recent years

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Joel Schlesinger for the Edmonton Journal Debt |  Edmonton Journal Homes Getty Images / iStockphoto

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Edmonton homeowners are Canada’s leaders in missed debt payments, a new study found.

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Free credit score provider Borrowell recently released a survey that found that Edmonton homeowners missed 0.19 payments per homeowner. That’s nearly two in ten homeowners based on August credit reports, says Andrew Graham, CEO and co-founder of Borrowell.

“Edmonton has the highest missed payment rate for homeowners … and also among non-homeowners for major cities in Canada,” he says.

Almost every third Edmonton consumer without a mortgage had missed a payment, the study found.

Collectively, nearly three in ten Edmonton consumers had missed a payment among the more than 874,000 credit points surveyed across Canada. That is compared to the national average of about two in ten.

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“For homeowners, Edmonton is about twice the Canadian average of about one in ten,” says Graham. “Despite the fact that Edmonton’s mortgage debt is below the Canadian average.”

Nationally, homeowners had an average mortgage of $ 359,597 compared to Edmonton homeowners of $ 314,863.

By comparison, Toronto homeowners carried an average mortgage of about $ 574,246, with only about three in 100 missing a bill.

Calgary also had a higher incidence of missed bill payments, about 16 percent of homeowners with mortgages averaging about $ 354,000. Calgary also had the highest non-mortgage debt among homeowners in Canada at $ 36,330, compared to the national average of about $ 34,000. Calgary had the largest amount of non-mortgage debt among non-homeowners at $ 23,762 compared to the national average of about $ 20,000.

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Edmonton had the second highest number for non-mortgage debt at about $ 35,800 among homeowners and for non-homeowners at about $ 22,300.

Graham says the above-average debt levels and missed payments may reflect the poor health of Alberta’s economy over the past six years.

“There have been a number of economic challenges and that absolutely contributes to them,” he says.

Still, some metrics, such as higher levels of non-mortgage debt, could reflect higher affordability in Edmonton as more people are likely to qualify for a mortgage.

“We are relatively lucky with house prices in the Edmonton area compared to the larger markets in Canada,” said Jason Goodwin, mortgage broker of Paragon Mortgage Inc. in Edmonton.

Additionally, he notes that first-time buyers know more than ever what to do to prepare for a mortgage.

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Still, with more part-time, seasonal and gig economy workers with fluctuating incomes, income requirements can be challenging, he adds.

In turn, more potential buyers seek advice from professionals such as mortgage brokers to help develop down payment plans and budget while reaching out to family for help with a down payment.

Still, the study highlights how Alberta’s recent economic troubles have weighed on the housing market due to higher consumer debt.

“To buy a house, you have to be able to make a down payment,” says Graham. “So when you have a lot of debt, that down payment can be more difficult to get.”

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