In the shadow of Toronto’s gleaming towers, 32-year-old Marcus Brennan contemplates the mortgage statement that arrived yesterday—a monthly reminder of his increasingly precarious financial situation. “When we bought in 2021, the payments seemed manageable. Now they’re consuming almost everything we earn,” he confesses, echoing a sentiment that has become alarmingly common among Canada’s younger homeowners.
Recent data from the Bank of Canada reveals a troubling trend: Canadians under 35 are now approximately seven times more likely to be struggling with mortgage payments than their counterparts over 65. This stark generational divide in financial stability has economists concerned about the long-term implications for the Canadian economy.
“What we’re witnessing is unprecedented in modern Canadian history,” explains Dr. Elise Moreau, senior economist at the Canadian Centre for Housing Analysis. “Young homeowners who entered the market during the pandemic buying frenzy are now caught between escalating interest rates and stagnating wages, creating a perfect storm of financial vulnerability.”
The numbers paint a grim picture. Approximately 18% of mortgage holders under 35 report allocating more than 45% of their after-tax income to housing costs—well above the 30% threshold considered financially sustainable. By comparison, just 2.6% of homeowners over 65 face similar constraints, according to Statistics Canada’s latest household survey.
This disparity stems from several factors converging at once. Young buyers typically entered the market with minimal down payments, resulting in larger mortgages relative to income. Many opted for variable-rate mortgages that seemed attractive during the pandemic’s ultra-low interest environment but have since become financial albatrosses as rates climbed.
“I locked in at 1.8% in 2020, but my renewal this year came in at 5.4%,” says Melissa Chen, a 29-year-old Vancouver homeowner. “That’s an extra $1,100 monthly for the same mortgage. I’ve taken a second job just to make ends meet.”
The financial pressure extends beyond mortgage payments. Credit card utilization among young homeowners has increased 23% year-over-year, suggesting many are turning to high-interest debt to bridge monthly shortfalls. Meanwhile, retirement savings contributions have plummeted, with 41% of struggling young homeowners reporting they’ve suspended RRSP contributions entirely—mortgaging their future to maintain their present.
The political implications are substantial. The federal government faces mounting pressure to address housing affordability while provincial authorities grapple with the competing interests of current homeowners and those still hoping to enter the market. The Bank of Canada’s decisions on interest rates now carry even greater significance for this vulnerable demographic.
Financial institutions have responded by expanding mortgage assistance programs, but critics argue these measures merely delay inevitable reckonings. “Extending amortization periods provides temporary relief but increases the total interest paid over time,” warns financial planner Raymond Choudhry. “It’s treating the symptom rather than addressing the underlying affordability crisis.”
For their part, younger Canadians are adapting through necessity. Co-ownership arrangements, multigenerational housing, and converting portions of homes into rental units have all become increasingly common strategies. Some have reluctantly relocated to more affordable regions, trading proximity to urban employment centers for manageable housing costs.
The contrast with previous generations is stark. Baby boomers largely benefited from decades of housing appreciation while facing considerably lower carrying costs relative to income. Many purchased their first homes when the average property cost approximately three times the median annual income—a ratio that has ballooned to over ten times in major Canadian markets today.
This generational housing inequality threatens to reshape Canadian society in profound ways. Delayed family formation, reduced geographic mobility, and diminished entrepreneurship are already emerging as consequences of the housing affordability crisis. Economic analysts warn that the ripple effects could undermine Canada’s competitiveness and productivity for decades to come.
As policymakers and financial institutions wrestle with potential solutions, the question remains: have we created a housing system that systematically disadvantages younger generations, and if so, what fundamental reforms are needed to restore intergenerational equity in Canada’s property markets?
