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carrick on money

Perfect houses

I wonder how well Canadians are doing in handling their mortgages. I'm not too worried about defaults – only soaring unemployment or rising rates would increase the number of people who can't pay what they owe on their homes. What concerns me are more subtle issues: Whether hefty mortgages are preventing people from saving enough and causing them to take on further debts.

To find out, we created this online calculator to help people find their Real Life Ratio. The RLR is a measure of how well you can afford your home and manage other everyday costs such as car loans, daycare and savings. Please try the calculator to see where you stand. You'll also be helping us build a database on how well people across the country are doing with their mortgages. We plan to gather a national Real Life Ratio number and write about it. We'll also show RLR numbers for millennials and other demographic groups.

If you're finding it tough to juggle your mortgage and other costs, let's talk about it. We're looking for people who are willing to be interviewed and have their real name used. The ones we choose will get a financial checkup from an accredited financial planner. You can reach me at

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Today's featured financial tool
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Ask Rob
The question:
"My mother is 62 and will need to retire soon for medical reasons. Her real wealth is tied up in her house – current market value is approx. $650,000 with a mortgage of approx. $130,000. So the question is: Does she sell and then rent at a reasonable rate moving forward, assuming she lives for another 20 years? Would a reverse mortgage make sense?"

My reply: Selling and then renting can make sense, but you need to be sure your mother can afford rent and other living expenses without depleting her savings. You don't say anything about your mom's health, but planning for 20 years may not be enough if she's doing well. She could be paying rent for 25 to even 30 years. Can't see a role for a reverse mortgage here. They're best used by people who need to unlock some of the equity in their home for a short period of time before they move.

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