Canadian mortgage debt reaches nearly $2 trillion

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

Overall, households are in dire straits for $2.694 trillion as of March 2022.

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

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

This represents a 0.6% monthly increase of $13.2 billion compared to February 2022.

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

The level marks an increase of $12.7 billion from February 2022.

Mortgage debt increased 10.5 percent year over year, Statistics Canada noted.

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

The increases have “an impact on borrowing costs, especially those linked to variable-rate loan products.”

The central bank is expected to continue raising its rate for the rest of 2022 and into 2023 to control inflation.

Statistics Canada explained that household loans take two forms.

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

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

Speaking of non-mortgage loans, this particular debt grew $1.7 billion or 0.2% per month in March 2022 to $704.5 billion.

Home equity lines of credit increased 0.3 percent, or $510 million, to $167.3 billion.

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

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