Canada’s household debt continued to rise in June, but the pace of growth is slowing as mortgage borrowing loses momentum following the low-rate boom. While mortgage debt remains the largest component of household borrowing, consumer credit is now expanding faster, driven by increased reliance on higher-interest borrowing.
Household debt increased 0.6% to $3.29 trillion in June, representing a 4.3% increase from the previous year. Mortgage debt grew 0.6% to $2.45 trillion, while consumer credit climbed 0.87% to $835.0 billion, outpacing mortgage growth and reaching one of its fastest annual growth rates in recent years.
The shift toward consumer credit is raising concerns about household financial pressure. Analysts point to trends such as consumption smoothing and distress borrowing, where households use credit to manage rising expenses and depleted savings. As non-mortgage borrowing accelerates and insolvencies increase, the trend suggests more Canadians are relying on credit to maintain spending levels.
