Residential Mortgage Debt of OECD Countries as a Percentage of GDP in 2023:
• 🍁 Canada has the highest mortgage debt-to-GDP ratio among G7 countries, standing at 74%.
• In comparison, the U.S. has a mortgage debt-to-GDP of 47%, significantly lower than Canada’s.
• Switzerland stands out due to its unique mortgage system, which contributes to its high mortgage debt:
1. The first mortgage (up to 2/3 of the home value) does not need to be repaid and can remain interest-only indefinitely.
2. Additionally, mortgage interest in Switzerland is tax-deductible, further influencing its mortgage debt dynamics.
• Turkey has the lowest mortgage debt-to-GDP ratio among the studied countries because getting a mortgage in Turkey is less common due to both cultural and financial factors.
Overall, the graph confirms that home prices, and consequently mortgage amounts, in Canada are not well aligned with the Canadian economy.
Check out the percentage of other major components of Canada’s household debt as of October 2023.
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