Canadian Mortgage Debt Is Rising A Half-Billion Dollars Per Day On Average

Canadians were still racking up significant mortgage debt in the latest numbers from the central bank. Bank of Canada (BoC) data shows outstanding mortgage credit pushed significantly higher in June. Annual growth has begun to slow, but households still managed to add an average of over $500 million in mortgage debt per day. 

Canadians Added A Half Billion In Mortgage Debt Per Day 

Canadian mortgage debt is slowing down, but that doesn’t mean it’s slow. The outstanding balance reached $2.03 trillion in June, up 0.9% (+$18 billion) from a month before. It’s up 9.7% ($178.7 billion) compared to the same month last year. Yeah, that’s still averaging more than a half-billion dollars per day. 

Canadian Residential Mortgage Debt

The outstanding balance of Canadian residential mortgage debt held by institutions.

Source: Bank of Canada; Better Dwelling.

Canadian Mortgage Debt Is Slowing In Growth… A Little

Annual growth is now down from the decade high reached earlier this year. June’s 9.7% is the lowest rate of growth seen since May 2021. Prior to May 2021, this level of growth had only been seen since September 2008. 

Canadian Residential Mortgage Credit Growth

The 3-month (annualized) and 12-month rate of growth for Canadian residential mortgage credit.

Source: Bank of Canada; Better Dwelling.

Mortgage Growth Remains Elevated Compared To Historic Norms

Typically larger numbers are harder to grow at a faster rate, but it’s not the case in Canada it seems. Outside of the minor drop on annual growth,  households are still racking up mortgage debt at an unusually fast rate. 

The two year rate of growth to minimize any odd comparison shows 20.5% growth. It has yet to decelerate with the annual comparison only showing minor reductions. We need to go all the way back to June 2009 to find anything even close to that number. The outstanding balance was only half the size back then, and population certainly hasn’t doubled in between. 

Mortgage credit is slowing and annual growth is tumbling at an extremely fast rate. This is far from slow growth though, it’s just slower than February. Canadians were still racking up significant debts in June, despite higher interest rates. Though June was before the massive 1 point hike we saw in July, that may have destroyed the last of the market’s exuberance for now.