Canadian Mortgage Debt Has Hit A New All-Time High For 261 Consecutive Months

Canadians are hoarding mortgage debt like it’s toilet paper and a pandemic just broke out. Bank of Canada (BoC) data shows seasonally adjusted mortgage credit hit a new high in November. That statement may not be as impactful as it used to be — it has printed a record high for more than 250 consecutive months now. The speed at which it’s growing might pique some interest though. Mortgage debt is rising at one of the fastest annual rates in history. Some signs of slowing have appeared, but even slower growth is still rapid at these levels. 

Canadian Mortgage Debt Hit Its 261st Consecutive Record High

Canadian outstanding mortgage credit has reached a new record high. The balance of mortgage debt reached $1.93 trillion in November, up 0.9% ($16.8 billion) from the previous month. It’s now 10.4% ($180.6 billion) higher than last year. Canada’s mortgage debt has hit a record high for 261 consecutive months, which is 21 years and 9 months. We’d have to check, but it very well could be one of the longest streaks in the world. Most countries see payments exceed the pace of borrowing at least once in a twenty year span. Not in Canada. 

Canadian Residential Mortgage Debt

The outstanding balance of Canadian residential mortgage debt held by institutions.

Source: Bank of Canada; Statistics Canada; Better Dwelling.

Canadian Mortgage Debt Has Been Growing At The Fastest Rate In Over A Decade

Speaking of growth, let’s look at how fast the past few months have been. Before July 2021, Canada hadn’t seen double-digit mortgage debt growth since 2008. Back then, the BoC tried to cool the market with rate hikes while the debt continued to climb. Most of the impact from higher rates fell on Western Canada, which eventually saw home prices take a dip. Places like Toronto didn’t see much of a drop, having yet to recover from the 1989 peak on an inflation-adjusted basis. 

Annual growth isn’t providing a clear trend showing where it’s heading next. November’s rate is higher than the month before, showing acceleration. It follows two months of deceleration prior though. That makes it unclear if it’s just taking a breather from a downtrend, since growth doesn’t walk a straight line. Similarly, the declines in the previous month have only persisted for two months, meaning that may have been a break from the uptrend. This data shows neither a clear up or down trend at this point. 

Canadian Residential Mortgage Credit Growth

The 3-month (annualized) and 12-month rate of growth for Canadian residential mortgage credit.

Source: Bank of Canada; Statistics Canada; Better Dwelling.

Canadian Mortgage Debt Is Showing Some Signs of Slowing

The short-term, 3-month (annualized) growth rate shows a sharp acceleration for growth. The rate hit 9.7% in November, higher than the month before. It was still way below the recent peak in June, and more importantly, the annual rate. If the 3-month breaks above the 12-month trend, the mortgage boom is still going. Until then, it looks like mortgage credit is slowing with a little noise.

Don’t confuse slowing mortgage credit growth with slow mortgage credit growth. Canadian mortgage debt is still growing at one of the fastest rates in the past decade. Few periods in Canadian history have seen this kind of growth. Ever. However, there are some signs the pace will moderate.