Graham and the doodle moved from godless Etobicoke to Virgil three years ago.

You remember 2021: It was nuts.

Mortgages were handed out at two per cent or less. COVID was still a thing. Urban refugees swarmed the countryside, startling the locals and paying stupid prices for their houses.

“A mortgage of, like, a million wasn’t too scary when we took the loan,” he tells me. “Now we have to renew and it terrifies me. I should have gone with a five-year mortgage. Or borrowed less. And now a recession’s coming. Are we screwed?”

Simple questions. What should they do? Is the economy pooched? 

Lots of news lately regarding personal finances, debts, houses, loans and investing. The Trudeau feds are spooked about the polls, while the central bank is seized with employment and how to (maybe) weather a Trump win.

All this brings changes which touch on the things Graham worries about.

First, the cost of money is plunging, and will continue. Rates here have plopped three times with two more to come on Oct. 23 and Dec. 11. One may be a hefty half-point.

Meanwhile the U.S. Federal Reserve System started cutting, too, also by a half — surprising and arousing the stock market.

After telling us for two years we had to pay more on mortgages, rents, loans and credit cards to get inflation down, the bankers can’t cut fast enough.

Turns out 23-year highs were way too much. Real estate went comatose, layoffs happened, the jobless rate jumped uncomfortably and folks like Graham panicked.

So, down she goes.

And look what’s happened to mortgages. Wow. The biggest stuff since Stephen Harper blew up real estate with zero per cent down payments (that was a disaster).

In a few weeks all first-time buyers can get 30-year amortizations. Yes, they pay a lot more interest but the monthly is less.

People will also have mortgage insurance on homes worth up to $1.5 million. That means a 20 per cent down payment is no longer needed above $1 million. 

Thus, a $1.3 million home in Virgil can be financed with a down of $105,000, as opposed to $260,000. Buy with less money and more (shudder) debt.

The government can’t shrink prices. So folks are seduced into bigger loans.

That mortgage of almost $1.2 million at today’s rates costs about $6,700 a month (plus property tax, utilities, insurance and enough weed to stay calm).

Income required: About $250,000 for first-time buyers with no equity. And guess how many of those are around?

Meanwhile, the inflation rate’s back to the two per cent level, stocks have hit a series of record highs, wealth inequality is worse and Pierre Poilievre will have a cow if there’s no election soon.

The public mood is sour. Houses are crazy. High rates didn’t bring lower prices. There are still 8,000 people in NOTL without a family doctor. And now there’s employment anxiety.

So are things bad enough for Graham to consider selling and tenting beside the QEW when the giant mortgage comes due? 

Nope. First, nobody should be selling anything until the spring. Rates will be lower, the U.S. election over, and pent-up buyer demand higher.

Second, mortgage renewals over the next few months are looking better, now that interest levels have fallen and the feds decided borrowers can shop around among lenders without having to pass a stress test to prove affordability. Best to go variable.

Third, recession’s unlikely. Yes, unemployment will swell more. The GTA condo market will be a swamp. People will still hate Galen Weston when they buy food. But the economy won’t collapse. 

It’s the big borrowers we need to worry about. 

Did you ever think seven-figure debt would be normal? This may not end well.