Over thirty years ago my grandmother told me that a good friend of theirs who had been very successful in buying and selling real estate said: “Toronto is built on mortgages. If I don’t have a mortgage I’m not making money.” So many years ago he was before his time. Today, the concept of making money on having a mortgage has never been more true.

In many cases buyers are not really thinking about paying off the mortgage when they buy. They are thinking more about borrowing (and in most cases borrowing a lot) to live where they want, then possibly upgrading, and then eventually selling when they need. Or, homeowners are taking equity out of their homes to invest and making money off other investments. Older parents in expensive homes are taking equity out in order to help their kids buy real estate. It appears that everyone has a mortgage. The low cost of borrowing and low inventory are driving prices up in a sharp line. The question is – how sustainable is this and is this a house of cards that will eventually topple over.