If my interest rate went up 3%, my payments would go to $171/week, hardly soul-crushing, considering that is including a bonus 40% prepayment every week.
However, I agree, our mortgage system is more volatile than the US market. Given that, and our tougher lending laws, I think our mortgage system is less likely to implode than yours is. Will we see a correction, I think we will in some markets, but I'm not expecting a meltdown like the US market.
I bought my house with 64% down, and if we use the latest city tax assessment, I have 16.8% loan to value.
0-down mortgages are gone, and I think it has also become very hard to get a 5% down mortgage. CMHC insures all non-conventional mortgages (less than 20% down), and I don't think you guys had that in the US, but I might be wrong.