Canadian Household Debt Hits $2.28 Trillion, As Mortgage Growth Further Accelerates

Canadian household debt was seeing growth speed up, even in the beginning of the pandemic. Bank of Canada (BoC) data shows the balance of household credit reached a record high in March. Household debt is now growing at the fastest pace in years, which likely isn’t the bullish sign it usually is.

Canadian Household Debt Reaches $2.28 Trillion

Canadian household debt reached a new record high, with substantial growth. The balance hit $2.28 trillion in March, up 0.44% from a month before. This represents an increase of 4.6% from the same month last year. Most of the acceleration is coming from rising mortgage growth.

Canadian Household Debt Outstanding, Percent Change

The annual percent change of total debt held by Canadian households, in Canadian dollars.

Source: Bank of Canada, Better Dwelling.

Mortgages Credit Represented 80% of All Growth

Mortgage payments represent the majority of the balance, and growth. The outstanding balance of mortgage credit reached $1.64 trillion in March, up 0.49% from the month before. This represents an increase of 5.3%, compared to the same month last year. Growth has now accelerated to the highest level since November 2017. This segment was overrepresented in growth, representing roughly 80% for the month.

Canadian Household Debt Outstanding In Dollars

Total debt held by Canadian households, in Canadian dollars.

Source: Bank of Canada, Better Dwelling.

Consumer Credit Rises, But Is Still Slow

Consumer credit is still below its peak, but starting to see the growth rate accelerate. The outstanding balance of consumer credit reached $638.56 million in March, up 0.31% from the month before. This represents an increase of 2.7% when compared to the same month last year. Growth has accelerated to the highest level since September 2019, but is still slow compared to historic growth.

Canadian Household Debt Change

Annual percent change in debt held by Canadian households.

Source: Bank of Canada, Better Dwelling.

Household debt is rising across Canada, but it’s likely not the healthy bounce wanted. Consumers borrow in one or two scenarios – when they are confident in their ability to repay, and when they need cash. Considering banks are giving hundreds of millions worth of payment deferrals, this is likely the latter.

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  • Thomas 3 years ago

    Expect this to surge with all credit growth, since the government has basically ordered lenders to lower the barrier to borrowing.

    • george 3 years ago

      yeah sure…like the lenders will give mortgages for those who are on government cerb cheques

  • Steven Adams 3 years ago

    I’m wondering how much of this increase in debt is due to consolidation loans? It seems that every other ad on the radio is telling people that if they own their own home they are willing to lend them money. It would appear that many of the pundits are concentrating on mortgage debt by itself, and feel that the housing market won’t drop too much because it is now too big to fail. What about all the other debt that is tied into the value of real estate – the piggy bank that people have continued to borrow against? My bank kept on offering me a HELOC, and I kept on turning them down, many others haven’t. People are maxed out, and are expecting the government to bail them out. Is this right? Should those among us who are savers, and have lived within our means be penalized, and help contribute to a bailout of those who haven’t? I’m voting no.

  • Snarky 3 years ago

    Many times I thought the market would correct itself (seemed plausible after stress test) but now I see that the money injection this broken housing Ponzi scheme system adds to the economy (homeowners, speculators, landlords, fomo, taxes, realtors, brokers, credit unions, banks, renovations, retrofitting) is just too big to fail. Expect more incentives, deferrals. Reason has left…

  • Darren Stone 3 years ago

    Things they don’t teach you in school.
    A mortgage is an unlimited liability.
    A house (not the land) is a deprecating asset.

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