Canadians playing it safe with mortgages, report finds - The Globe and Mail

Not too sure what the point of this report is. Do fixed rate mortgages somehow mean that we are not a bubble, and therefore nothing should be done?

Canadians playing it safe with mortgages, report finds - The Globe and Mail

Of course, this is absurd.

Let's pretend that everyone who bought stocks on margin during the Dot Com bubble took out a fixed rate loan. According to the reasoning of the article, this would mean that people would be able to afford the interest payments since they are fixed, and therefore there would be no need to worry. Let's ignore the HUGE leverage that people take on to buy houses. Let's also ignore the fact that if houses do start to go down (and having a fixed-rate mortgage will NOT prevent this), people will want to get out while they are still ahead.

One other important thing that is ignored is the fact that houses are UNPRODUCTIVE assets!! This is a very important point. Building houses do NOT make us more productive. And the only hope of paying off all these mortgages is to become more productive. Imagine if all this money had gone into building IT infrastructure, into building factories, and research facilities.

Sorry everyone, I do not have any comfort knowing that Canadians are "playing it safe with mortgages", especially since the article does not provide any Loan-to-value figures, down payment amount, income to loan ratio, or anything else meaningful to show how much leverage people are taking, and leverage is the key here.