Canadian mortgage debt is smashing historical records, rising faster than ever before.
According to a new report from Statistics Canada, in June, Canadians added $23.6 billion worth of mortgage debt, marking a 1.4% jump from May’s numbers. This is the largest monthly increase ever on record.
Year-over-year, mortgage debt grew 9.2%, a pace that hasn’t been seen since October 2008. And for further context, the report notes that in the first half of 2021, Canadians added $81.6 billion in mortgage debt. For the entire year of 2020, the total amount was $108.6 billion.
Although the real estate market peaked in March of this year and has been slowing down incrementally since then, the report attributes the June record-high to two possible factors. One is that there is typically a time lag between the sale of a home and the receipt of mortgage funds. The second is that borrowers may be taking out additional equity on their homes or consolidating debt when refinancing existing mortgages.
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Non-mortgage debt grew by just 0.4% in June to $789.2 billion, with credit card debt and other personal loans the largest drivers.
“Credit card debt increased for the fourth month in a row as pandemic-related restrictions eased,” the report reads. “Lines of credit also rose by $1.7 billion, but this was fuelled by growth in home equity lines of credit.”