Canadian household debt levels have reached yet another new high in September, with mortgages accounting for most of the increase, figures from the Bank of Canada indicated.
During that month, the nation’s balance of household debt broke through $2.24 trillion, which was up by 3.8% (approximately $82 billion) from a year ago.
Consistent growth pushed mortgages further as the largest portion of this debt, accounting for $1.6 trillion of the September measure. This represented a 4.2% annual rise, for a total increase of $63.8 billion from last year.
Relaxed credit requirements were a major driver of this robust pace.
“The accumulation in September is also 16.7% higher than last year,” housing information hub Better Dwelling stated in its analysis of the BoC data. “Mortgage debt growth is accelerating, despite demands for a looser borrowing criteria.”
A recent analysis by the BC Non-Profit Housing Association has warned that these trends have made it far easier for Canadians to overspend over the last few years.
As much as 1.8 million households nationwide are setting aside more than 30% of their incomes on housing, while roughly 800,000 are spending more than 50% of their incomes on rental fees, the group stated.
“Paying too much for rent has become the new normal,” Association CEO Jill Atkey told Global News. “That takes a real toll on health, on time and quality of life.”