Spurred by low interest rates, Canadians last year took on mortgage debt at the fastest pace in a decade.
Residential mortgage credit rose 7.7% in 2020 to $1.7 trillion, representing an annual increase of $118 billion, according to Statistics Canada. That’s the fastest yearly growth of mortgage loans since 2010, far above the 5.4% yearly growth average over the past decade. It also represents the first time ever that mortgage debt has increased by more than $100 billion in one year.
The acceleration in borrowing has been driven by historically low interest rates, adding pressure to Canada’s red-hot real estate market that has fueled sharp price gains across the country.
Excluding mortgages, credit actually fell in 2020 for the first time on record dating back to the early 1990s, declining by 1.5%. That was due largely to generous government support programs rolled out during the pandemic, as well as restrictions that limited shopping and travel.
Overall household credit -- mortgage and non-mortgage debt -- rose at a 4.5% pace, about average over the past decade.
