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If all the mortgage debt in Canada is added up, the total may seem staggering.
Dollar for dollar, borrowers in Canada were saddled with $1.42 trillion worth of outstanding mortgages by the end of September, according to DBRS, a credit-rating agency based in Toronto.
Total mortgage debt grew 6.1 per cent from a year ago, and is up a massive 250 per cent from 1999, says DBRS.
These figures come by way of the credit rating agency’s latest Canadian Housing Indicators report, published this week.
“Residential mortgage credit continues to grow at a steady pace in the current extended low interest rate environment,” the report states.
The Bank of Canada has flagged high household debt, largely the result of mortgage borrowing, as a key risk facing the Canadian housing market.
Canadians owed about $1.67 in credit market debt for every dollar they earned on average in the third quarter of this year, according to Statistics Canada.
However, while credit market debt has been rising in recent years, Canadians typically haven’t been getting stretched financially thinner to repay their mortgages.
“Despite increasing debt levels, the amount of household disposable income allocated to service mortgages have remained stable since 2008,” says DBRS.
In this year’s third quarter, Canadians spent 6.1 per cent of their disposable income for mortgage payments.
And in a low-interest-rate environment, a greater share of mortgage payments are going towards the principal.
“Canadian mortgage defaults remain low,” the third-quarter report adds, pegging the national share of mortgages in arrears at 0.28 per cent.
But while the percentage of mortgages in arrears has been declining in Ontario and BC, it has been getting higher in Alberta, Saskatchewan and the Atlantic provinces.
“[The] recent increase in unemployment in the provinces most affected by the downturn in energy prices has created differences in regional performance,” says DBRS.