Debt-to-income ratio of Canadian households declines in Q4

Debt-to-income ratio of Canadian households declines in Q4

Debt-to-income ratio of Canadian households declines in Q4

Household debt as a percentage of disposable income declined in the fourth quarter of 2019.

Citing data from Statistics Canada, a Canadian Press report revealed that total household debt in Canada declined by $400 million in Q4 2019 to $26.2 billion on a seasonally adjusted basis. This roughly translates to households owing an average of $1.763 for every dollar of disposable income.

Read more: Household debt balance breaks previous record yet again

However, Canadian Press reported that the household debt service ratio, which measures how much income goes to paying interest, rose by 14.98%.

Meanwhile, the net worth of the household sector spiked by $186.5 billion in Q4 to almost $11.7 trillion. Mortgage demand also rose to $18.4 billion – however, consumer credit and non-mortgage borrowing dipped to $7.8 billion.