Milton is the Most Mortgaged Place in Canada

Jane Pinzhoffer

Jane Pinzhoffer

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Milton real estate has the highest concentration of mortgages in Canada, according to a recent Toronto Star article.

Milton is ground zero for Canada’s growing mortgage crisis.

Milton real estate agents Ariel Kormendy and Adrian Trott look at the cause of this phenomenon and the contributing factors that have made Milton the hotbed for growing mortgage concerns in a recent episode of KT Confidential | The Real Estate Podcast.

A Rapidly Increasing Population of Young Families, Immigrants, and First-time Homebuyers

Milton is a youthful town with an average age of thirty-five. The town often draws new residents from busier, and more expensive suburbs, such as Mississauga, Brampton, and Oakville, as well as many individuals and couples from Toronto, especially those looking to begin their journey of raising a family.

Although home prices have decreased over the past year, they’re still expensive. The average home in Milton is just over $1,000,000. Even with the government’s incentives offered to first-time homebuyers, coming up with a 5 percent down payment can be difficult for young families and newcomers to Canada.

The population growth in Milton over the last few years has been pretty profound. It was Canada’s fastest-growing municipality in Canada between 2001 and 2011, with a whopping 71.4 percent population increase from 2001 to 2006 and an additional 56.5 percent between 2006 to 2011.

The population is over 140,000 and will continue to grow based on the new construction planned for the next five to ten years.

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Milton is a very car-dependent community. Many households have two cars that require insurance, gas, and maintenance. Food prices have gone through the roof. Internet, hydro, and gas have gone up. School-age children are often in extra carricular activities. Entertainment, streaming packages, and weekend events get expensive too. When you add up everything you’ll spend in the month and compare how much you budget for, people are left with less and less for their mortgage. All those extras come into play, and you may have to decide what’s important. Where can you save money?

The Number of Mortgage Pre-approvals is Up Significantly

In January of this year, pre-approvals for new mortgages and renewals were up significantly. Variable-rate mortgages have become very popular, and people may be renewing mortgages prematurely to extend them to 30 or 35 years to keep the payment reasonable.

People who bought a home before 2015 were sitting on a lot of equity. Many have refinanced at low rates and used that money for other things such as travel, paying off student debt, or buying a cottage or investment property. That was back when mortgage rates were so low it was almost like free money. Now the percentage of a mortgage in their residence has increased.

Milton is Growing

Another reason Milton has such a high percentage of mortgages is because many people bought investment properties. They’re mortgaging as much as they possibly can because it’s deductible from the income on that property. According to this CBC article, 1 in 5 properties in Canada is owned by investors.

Milton also has the newest builds in the area, attracting investors since new homes don’t require any further cash injection for maintenance, renovations, or upgrades.

Milton has more land than the surrounding areas, and the Ontario government is allowing more land to be used for development to keep the trend going. It’s no wonder it’s forecast that the population in Milton will be greater than that of Oakville and Burlington combined.

Unfortunately, being the most mortgaged city in Canada means many people in Milton are concerned about their finances, and many are on the brink of making some tough decisions.

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