Canadians Unfazed by High Rates: Mortgage Debt Up Despite Borrowing Costs

Canadians Unfazed by High Rates: Mortgage Debt Up Despite Borrowing Costs
May 17, 2024

Canadians are back to taking on debt, with the latest figures from Statistics Canada showing a renewed appetite for borrowing in March 2024. This comes after a brief pause in January, where households even managed to chip away at some debt.

While a reduction in household debt is uncommon in Canada, January's trend proved short-lived. The total amount owed by Canadians now sits at a staggering $2.945 trillion, just shy of the $3 trillion mark. This represents a significant increase of $97 billion compared to the previous year.

Real Estate Remains the Top Borrower

The driving force behind this surge in debt? Look no further than real estate. Mortgage and home equity line of credit (HELOC) debt saw the biggest increase in March, climbing $6.5 billion. This highlights the enduring appeal of Canadian real estate, even with interest rates at multi-decade highs. When adjusted for inflation and population growth, mortgage debt is still up 4.2% year-over-year.

Canadians are clearly demonstrating their confidence in the long-term value of real estate. While interest rates may have cooled the market somewhat, it hasn't deterred those committed to homeownership.

Debt Breakdown

Here's a closer look at Canada's household debt landscape:

  • Total Household Debt: $2.945 trillion (up from $2.848 trillion in March 2023)
  • Real Estate Secured Debt: $2.3 trillion (the majority of total debt)
  • Mortgage Debt: Up 4.2% year-over-year (adjusted for inflation and population growth)
  • Personal Loans: $124 billion
  • Credit Card Debt: $100 billion

What This Means for the Market

The rise in household debt suggests continued activity in the Canadian real estate market. With borrowing increasing, we can expect ongoing demand for homes, particularly from those who see long-term value and are prepared for the current interest rate environment.

Considering Buying a Home?

If you're thinking about buying a home, this data underscores the importance of careful planning. While real estate remains a sound long-term investment, it's crucial to factor in current interest rates and ensure your budget can comfortably accommodate the ongoing costs of homeownership.

Coldwell Banker Horizon Realty Can Help

Our experienced real estate agents at Coldwell Banker Horizon Realty can guide you through the home buying process. We can help you understand the market, navigate financing options, and find the perfect property that fits your needs and budget.

Contact us today for a free consultation and let us help you achieve your dream of homeownership.

Subscribe to our email newsletter!

Thanks for joining our newsletter
Oops! Something went wrong while submitting the form.

Related posts

Left Arrow
Left Arrow
Right Arrow
Right Arrow