Canadians collectively owe $1.8 trillion in household debt
A 6% increase from one year ago
Why are mortgages so expensive in Canada?
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TORONTO _ Canadians’ collective household debt has climbed to $1.8 trillion as an international financial group sounds an early warning that the country’s banking system is at risk from rising debt levels.
Equifax Canada says consumers now owe $1.821 trillion including mortgages as of the fourth-quarter of 2017, marking a six per cent increase from a year earlier.
Although nearly half of Canadians reduced their personal liabilities, roughly 37 per cent added to their debt to push the average amount up 3.3 per cent to $22,837 per person, not including mortgages.
The fresh numbers come as an international financial group owned by the world’s central banks says Canada’s credit-to-gross-domestic-product and debt-service ratios show early warning signs of potential risk to the banking system in the coming years.
The latest report by the Bank of International Settlements says Canada’s credit-to-GDP gap and debt-service ratios have surpassed critical thresholds and are signalling red, pointing to vulnerabilities.
The group, however, cautions that these indicators should not be treated as a formal stress test, but as a first step in a broader analysis.
MORE ABOUT DEBT:
- 10 ways women can grow their wealth
- Financial planning and mental illness
- New mortgage rules sending borrowers to alternatives
- What to do about your debt after the interest rate hike
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