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Originally Posted by Tron_fdc
I wonder how much money is floating around because of all the HELOC's that were utilized to buy new boats, cars, cottages, businesses, etc etc? Even a slight downturn in housing prices could cause problems that could cause ripple effects throughout the province......
Thinking out loud here, but it's possible, no?
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A cottage or business isn't so bad, but I've heard of "friend of a friend"s (so take it for what it's worth) who use the HELOC to buy that $60K SUV.
Your $100K cottage will still be worth a significant percentage of it's value if property goes down. But the SUV loses so much money every year.
The other thing that could happen is interest rates hit 8%. That would put my payment up $200 which would impact the entertainment fund. But somebody who is just barely making payments could also lose their house.