14 March 2019

He says the debt service ratio was up for a fifth quarter in a row and reached a record-high level.

This ratio represents the total obligated payments on credit market debt as a share of household disposable income. In Q4, it rose to 14.9%, following 14.7% in the third quarter.

Statistics Canada report shows that on a seasonally adjusted basis households borrowed $21.2 billion in the fourth quarter with mortgage demand growing by $2.3 billion to $12.3 billion.

Nevertheless, despite the hike in Q4, the annual comparison shows a 19.5% decline in borrowing to $84.6 billion in 2018 – it’s the lowest number since 2014.

Moreover, credit market debt, including consumer credit, mortgage and non-mortgage loans, reached the total amount of about $2.21 trillion in the fourth quarter.

In case of mortgage debt only, the number reached $1.44 trillion, while consumer credit and non-mortgage loans showed $769.4 billion.

If you have accumulated significant amount of high-interest credit cards debt, please talk to your mortgage broker. Mortgage rates are still very low and it might be a good idea to refinance your existing mortgage and get rid of bad debt. In some cases, it will free up hundreds or even thousands of dollars monthly for every day expenses or to pay your mortgage faster.