While the uptick in mortgages is good news for the industry, the levels of debt could be a future concern once mortgage rates climb upwards.
The latest bank data shows that total Canadian outstanding household credit rose to $1.869 trillion in August, up an annualized pace of 5.9% from July.
Compared to the previous year, household debts were up 5% – the highest year -over-year increase since October 2012. Residential mortgage debt shot up 7.5% annualized in August, raising the three-month rate to 7%.
However, consumer debt (credit cards, car loans, personal Lines of Credit) only increased a modest 2% during the same period.
During the first half of 2015, Canadians were making an effort to reduce their debt, according to a Manulife Bank of Canada debt survey. The Spring survey revealed that four in ten homeowners made an extra payment on their mortgage in the last 12 months, with 56% of homeowners reducing their debt.
Original article: www.mortgagebrokernews.ca/news