Canadian mortgage debt hits almost $2 trillion

    1 of 1 2 of 1

      A new Statistics Canada report shows much debt Canadian households owe.

      Overall, households are on the hook for $2.694 trillion as of March 2022.

      That’s 0.5 percent or $14.4 billion more compared to February this year.

      Statistics Canada reported that real-estate secured debt, which is composed of mortgage debt and home equity lines of credit, increased to $2.156 trillion in March.

      This represents a 0.6 percent month-over-month increase of $13.2 billion compared to February 2022.

      In particular, household mortgage debt increased 0.6 percent in March to reach $1.989 trillion.

      The level marks a $12.7 billion increase from February 2022.

      Mortgage debt increased 10.5 percent on a year-over-year basis, Statistics Canada noted.

      The report released Friday (May 20) recalled that the Bank of Canada raised its interest-setting rate in March 2022 to 0.5 percent, and again in April to one percent.

      The hikes have “impact on borrowing costs, especially those tied to variable rate loan products”.

      The central bank is expected to continue increasing its rate through the remainder of 2022 and into 2023 in order to tame inflation.

      Statistics Canada explained that household borrowing takes two forms.

      One is non-mortgage loans, which are “funds principally for consumption”.

      Mortgage loans represent “debt acquired to finance the purchase of a property”.

      Speaking of non-mortgage loan, this particular debt grew $1.7 billion or 0.2 percent month-over-month  in March 2022 to $704.5 billion.

      Home equity lines of credit rose 0.3 percent or $510 million to reach $167.3 billion.

      Meanwhile, credit card debt with chartered banks increased 0.9 percent or $727 million in March.