Canada

Canadians Now Owe Over $266 Billion In HELOC Debt

Canadians are once again comfortable spending their recent home equity windfall. The balance of home equity line of credit (HELOC) debt reached a new record high in July. Growth has recovered from last year’s low, and is now at the highest level since before the pandemic. 

Canadians Owe Over $267 Billion In Debt Secured By Home Equity

Canadian homeowners just borrowed another billion in home equity. HELOC debt reached $226.6 billion in July, up 0.42% ($1.11 billion) from the previous month. This represents a 4.20% ($10.73 billion) increase compared to the same month a year ago. It’s a new record high, but what isn’t these days? 

Canadian HELOC Debt

The total outstanding home equity line of credit (HELOC) debt held by institutional lenders.

Source: Regulatory Filings; Better Dwelling.

Canadians Are Borrowing Home Equity At The Fastest Rate Since 2019

The annual rate of growth for HELOC debt bounced back from the pandemic lows. The 4.20% annual growth rate in July marked the fourth consecutive month of acceleration. It now sits at the highest rate of growth since May 2019. 

Canadian HELOC Debt Growth

The annual percent change in the balance of home equity line of credit (HELOC) held by institutional lenders.

Source: Regulatory Filings; Better Dwelling.

Soaring home prices and low interest rates were expected to push HELOC debt higher. For most of the pandemic, Canadians used their home equity sparingly. Now that the economy has begun to reopen, they’re back to using their homes as ATMs.

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2 Comments

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  • Scottishflower 1 week ago

    I’ve never seen a house shaped like a piggy bank. Why treat it as such? Maybe it’s just me. I hate being in debt.

  • Bertrand 1 week ago

    Another great write-up. I’d love to see the outstanding HELOC debt chart overlaid with interest rates.

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