Canadians owe a staggering $2.4 trillion as debt jumps 7%

“Credit card demand has risen aggressively after being low for more than a year. New card growth was seen across all consumer segments, including sub-prime segments,” added Oakes. “Consumers have been making strong payments, but we are starting to see a shift in payment behaviour especially for credit card revolvers — those who carry a balance on their card and don’t pay it off in full each month. Average payment rates are at a lower level than 12 months ago for this group.”

Mortgage debt

Mortgage debt was impacted by the slowdown in the Canadian housing market in the third quarter of 2022.

There was a 23% decline in new mortgage volume year-over-year and total new mortgage originations were below the pre-pandemic average for the first time.

There was a 28% decrease in the number of first-time homebuyers but they are paying more than $500 a month more for almost the same loan amount as a year earlier due to interest rate hikes.

“Higher interest rates not only impact consumers opening a new mortgage but can also impact those reaching the end of agreed mortgage term periods who are looking to renew or refinance,” said Oakes. “More than 1.2 million mortgages are currently three to five years old, and 37% of these have an outstanding balance of more than $250,000. If these consumers do have to renew their mortgage over the next 12 to 18 months, they may experience significantly higher payments than they currently have.”