Canadian Consumer Debt Rises As People Defer Mortgage Payments

Canadian consumer debt rose in the most recent quarter as more consumers took out mortgages and people with existing houses deferred their mortgage payments.

According to a new report from Equifax Canada, total consumer debt climbed to $1.99 trillion in the second quarter, up 2.8% compared to the same quarter a year ago. Mortgage balances weighed on Canadians’ credit with increased refinancing activity and higher average home prices pushing the average debt per person to $73,532, which is 2.2% higher than in the second quarter of 2019.

Meanwhile, non-mortgage debt dropped relative to 2019 as economic shutdowns across the country impacted Canadians’ credit card usage.

Equifax found that many Canadians have resorted to credit and mortgage payment deferrals to help ease the financial stress caused by the COVID-19 pandemic. Deferrals have proven especially popular among Canadians aged 35-44, according to Equifax, where 15.1% have used some kind of deferral compared to 5.7% of seniors.

And while the 90+ day delinquency rate for non-mortgage debt sits at 1.24%, up 10.6% compared with the second quarter of 2019, Equifax said this is a continued trend from last year and doesn’t measure the true impact of the pandemic.