Banks and real estate analysts were busy last week. There were reports of bank book losses, due to the decline in oil prices, and an international organization as well as two Canadian banks called on Ottawa to tighten up the risks associated with soaring home prices. Rebuttals were made. Bank economists defended their choices and the week ended.

But in light of concerns raised and counter-arguments offered, I wanted to point out that there is validity in the concerns being raised. We are at risk. Canadian homeowners are at risk. Canadian investors are at risk. And Canadian taxpayers are at risk. Here’s why.

Canadian Homeowner Risks

It’s no secret: Canadian households have gone on a borrowing binge in the last few years. Late last year, Statistics Canada released data showing that the average household had nearly $1.64 in debt for every dollar of disposable income. That was a record high.

Part of the equation are the persistently low interest rates; rates that became even cheaper in 2015, after the Bank of Canada twice dropped its benchmark rate to help cushion the blow of the global oil and resource price slump.

But how does that impact homeowners? It’s the risk of what quickly climbing interest rates could do to our household balance sheets, said CIBC Deputy Chief Economist, Benjamin Tal, earlier this year. While, Tal doesn’t expect interest rates to climb anytime soon, it’s hard to discredit the debt numbers particularly when our nation’s own bank, the Bank of Canada, describes our ever-increasing mountain of household debt level as “the most-important vulnerability in the financial system.”

These concerns were most vocally addressed this past December, when Bank of Canada Governor Stephen Poloz stated that most of the debt exposure is concentrated among 720,000 households, or 8% of mortgage-holders, who currently hold more than 350% of debt when compared to their annual gross income. These are the households that would struggle to make debt payments either in the face of a significant economic downturn or when interest rates rise. It should be noted that while the number of households that seem to walk the insolvency line is under 10%, it’s still twice as many when compared to 2008, at the start of the global economic crisis.

Poloz did state the households that were closest to being in jeopardy tended to be younger Canadians (under 45 years old) who usually earn less money.

Up until now, there’s been little evidence of significant increases in mortgage defaults and delinquency rates. But the Royal Bank of Canada and the Equifax consumer credit monitoring firm have pointed to early signs of trouble—through a slight increase in auto loan defaults and credit-card delinquencies—in oil-producing regions like Alberta, where unemployment has climbed following the oil-price slide. The real test, however, will come when the concentration of debt, which is in household mortgages, is tested. As of January 2016, only 13,216, or 0.28% of Canadian mortgages, were in arrears (compared to almost 4.7-million mortgages on lenders’ books). The last time the percentage of defaulted mortgages rose above 1% was in 1996.