Canadian Mortgage Holders Are Paying Over 27% More Interest Than Principal

The Great Canadian real estate binge may be giving a few owners indigestion. Statistics Canada (StatCan) numbers show interest on mortgage debt reached a new high in Q4 2018. The spike is due to interest payments rising almost ten times faster than the pace of principal payments.

Canadian Real Estate Owners Paid Over $9.8 Billion In Principal

Canadian real estate owners are paying a huge amount to principal, but growth is slowing. Households paid $9.88 billion in mortgage principal in Q4 2018, down 0.21% from the previous quarter. The total paid in the quarter is 1.07% higher than the same quarter one year before. This is the lowest growth for principal payments since 2001.

Canadian Residential Mortgage Payments

The amount paid per quarter towards Canadian mortgages. Broken down by obligated principal and interest payments, in Canadian dollars.

Source: Statistics Canada, Better Dwelling.

Canadian Real Estate Owners Paid Over $12.6 Billion In Interest

The amount Canadians paid towards mortgage interest hit a new record. Mortgage interest payments hit $12.6 billion in Q4 2018, an increase of 3.86% from the previous quarter. The total paid in interest for the quarter is a whopping 11.12% higher than last year. This is a new all-time high for mortgage interest paid in a single quarter.

Canadian Residential Mortgage Payments Change

The annual percent change of payments made to mortgage interest and principal, per quarter.

Source: Statistics Canada, Better Dwelling.

The Growth Rate of Interest Has Dwarfed Principal

The growth rate of principal payments is slowing, while interest payments are soaring. The amount of principal payments fell for a 7th consecutive quarter in Q4 2018. To contrast, interest payments accelerated for 13 consecutive quarters by Q3 2018. It dropped slightly in Q4 2018, but growth remains almost ten times higher than that of principal. The result? For every 4 dollars in principal paid, Canadians are paying 5 in interest.

Interest payments always add up to more than principal, that’s not the takeaway. The growth rate of principal and interest payments is the interesting part. The growth for interest exceeds that of principal before interesting macro events historically.

Like this post? Like us on Facebook for the next one in your feed.



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Mica 5 years ago

    The house always wins… except against the bank.

  • KT 5 years ago

    That’s $12 billion a quarter to non-productive purposes. You know how far that would go in building a real economy, if people didn’t think condos with negative cashflow were the only investment they could make?

    • Tom Wolfe 5 years ago

      If memory serves, ScotiaBank spent $800,000,000 (eight hundred million dollars) on 20 years of naming rights for the ACC. That’s $109,000 per *day for 20 years. How can you call that ‘non-productive’? It certainly is confident 🙂

      ps – Ted Rogers bought the SkyDome (building and all) for $30M?

  • Investor 5 years ago

    It almost looks like we’re becoming too nitty picky about every statistical data out there. Didn’t we pay more principal than interest in 2007?

    • Brad 5 years ago

      No, the second graph that you’re referring to is the rate of change, the initial graph is actual payments.

  • Jupiter 5 years ago

    Interest rates needs to increase for second mortfages. We need to heavily tax investment properties. Housing prices needs to come down or we will face economic collapse.

  • Giuseppe Capozzo 5 years ago

    The interest rate bike’s from the Bank of Canada did “squat” for the economy and made the economy tougher.. FIRE THE IDIOT who gets his nice salary every week while screwing the mortgage community…

  • Joe Mainlander 5 years ago

    Sign the petition!

    “Mr. Morneau, don’t drive up home prices by loosening lending standards.”

Comments are closed.