New mortgage volume goes down in Canada, while credit card debts are on the rise

Canadians showed weaker mortgage borrowing activity in the second quarter of 2022, but reported growing non-mortgage debts.

However, according to Equifax Canada, the overall debt levels still saw an annual increase by 8.2% and reached a new record of $2.3 trillion.

The report shows that non-mortgage debt, for instance auto and credit card loans, rose by 5.2% to $591 billion, with an average balance for the average consumer now sitting at $21,128.

Obviously, high inflation (which was down slightly to 7.6% in July following a 40-year record high of 8.1% in June) has been raising the cost of living and significantly affecting consumers’ finances. Today, credit card balances are at their highest level since the fourth quarter of 2019.

“Financial stress is becoming very real for more and more Canadians,” – noted Rebecca Oakes, Equifax Canada. “We can see its influence on consumer credit not only in day-to-day credit card spending, but also in other non-mortgage debt, e.g. auto loans and lines of credit.”

At the same time, new mortgage volume fell by 16.4% annually. The average mortgage loan now is $367,500 overall, and $430,700 in case of first-time buyers. The expensive markets of Toronto and Vancouver saw average new mortgages exceeding $600,000.