Canada’s mortgage debt shows the fastest growth pace since 2007

While the national real estate market is cooling down slowly following a pandemic-caused activity hike, the Canadians are raising their mortgage debts at more than double the historical pace.

The recent report by Statistics Canada shows that the total amount of residential mortgages was up by 1.2% in June reaching $1.73 trillion (US$1.4 trillion) and marking the fastest monthly gain since 2007.

Such an increase points to Canadians’ demand for larger properties amid the COVID-19 pandemic, which pushed home sales and prices to record high levels. Supported by low mortgage rates, the total amount of housing-related debt in Canada was up by 9.2% over the previous year, which is the largest gain since 2008.

However, this high level of borrowing activity is expected to cool down, as well as Canada’s real estate market, which has already shown lower sales during the previous four months. “As a rule, there is a certain time lag between the home sale and the receipt of mortgage funds,” – the report says.