Canadian consumers are now carrying $2.1 trillion in debt, driven by mortgages

Equifax says the debt profile of Canadians has changed throughout the pandemic, with mortgages accounting for a larger portion of people’s debt.

At the same time, the credit reporting agency said consumer credit card debt is at a six-year low, as reduced spending led to healthier habits around daily spending.

The company said consumer debt now stands at $2.08 trillion for the first quarter of 2021, up 0.62 per cent from last quarter and up 4.78 per cent from the first quarter of 2020.

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It said the rise in debt was largely driven by mortgages, with the number of new mortgages up 41.2 per cent from a year ago.

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Rebecca Oakes, assistant vice-president of advanced analytics at Equifax, said the largest increases in consumer debt were in British Columbia and Ontario, which is a direct result of the hot housing markets in those provinces.

She said delinquencies were still happening at a much lower rate than pre-pandemic, as consumers continue to benefit from government financial support during the pandemic. But Oakes warned people need to prepare for those supports to subside to ensure their financial health.

© 2021 The Canadian Press

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