Mortgage debt in Canada soared above $1.7 trillion in June, rising at a month-to-month tempo by no means earlier than seen, in response to Statistics Canada.
The brand new figures present mortgage debt grew 9.2% in comparison with the identical time final yr, a tempo not seen since 2008, and jumped 1.37% since Might, which StatCan famous is the most important month-to-month enhance on report.
Within the first half of 2021, households have added $81.6 billion in mortgage debt, in contrast with $108.6 billion over all 12 months of 2020.
Traditionally low rates of interest have spurred demand for housing over the previous yr, regardless of report positive aspects in dwelling costs. StatCan added that the Workplace of the Superintendent of Monetary Establishments’ (OSFI) stricter stress take a look at qualification guidelines for uninsured mortgages got here into impact on June 1, “which can have spurred further borrowing previous to the deadline.”
“Whereas the rise in mortgage debt accelerated, the quantity of housing resale exercise and the common resale value have been on a downward pattern after reaching peaks in March of 2021,” the company stated, noting that there’s usually a lag time between the sale of a house and the precise receipt of mortgage funds.
“Nevertheless, debtors might also be available in the market for a brand new dwelling, or in any other case be taking further fairness out of their dwelling or consolidating debt when refinancing their present mortgages,” it added.
Non-mortgage debt additionally grew in June, led by a 2.7% rise in private loans and a 1.6% rise in bank card borrowing.
“Bank card debt elevated for the fourth month in a row as pandemic-related restrictions eased,” Statistics Canada famous. “Strains of credit score additionally rose by $1.7 billion, however this was fuelled by progress in dwelling fairness traces of credit score.”
Mortgage borrowing from personal non-financial firms additionally ticked up within the month, rising 0.9%, or $2.9 billion, to $346.6 billion.