Canadian mortgage debt is growing faster than ever

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Canadian mortgage debt is hitting historic records and growing faster than ever before.

Canadians increased their mortgage debt by $ 23.6 billion in June, up 1.4% from May, according to a new report from Statistics Canada. This is the largest monthly increase on record.

On an annualized basis, mortgage debt rose by 9.2%, the rate not seen since October 2008. For further context, the report notes that Canadians increased their mortgage debt by $ 81.6 billion in the first half of 2021. For the entire 2020, the total was $ 108.6 billion.

Canadian mortgage debt

Statistics Canada

Although the real estate market peaked in March this year and has been slowly slowing down since then, the report explains the June record with two possible factors. One is that there is usually a time lag between the sale of a home and the receipt of mortgage funds. Second, when refinancing existing mortgages, borrowers can purchase additional capital for their homes or consolidate debt.

Non-mortgage debt rose just 0.4% in June to $ 789.2 billion, with credit card debt and other personal loans being the largest drivers.

“Credit card debt is on the rise for the fourth straight month as restrictions related to the pandemic have been eased,” the report said. “Lines of credit also grew by $ 1.7 billion, but this was driven by an increase in lines of credit for home equity.”

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